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alexdok [17]
3 years ago
14

What is the condition for profit maximization for a pure competitive firm?

Business
1 answer:
Reika [66]3 years ago
4 0
I believe this needs to come from a non monetary source. Pure competition allows for no price change between firms. So profit maximization needs to come from market share. I believe the answer would have to be in service levels or ease of business improvements. If you are forced to have the same price levels the levers to pull are few but the exist only customer service, ease of transacting, other value add initiatives. Just my thoughts
You might be interested in
Under state law, a manufacturer must design a dangerous product so as to avoid harm to people who are using the product as inten
kumpel [21]

Answer:

b. liable, because it was foreseeable that a child would have access to and try to use a lighter.

Explanation:

BIC must foresee that any child may access the lighter, so they should put some warning on product so that the adults will notice to put lighters away reach of children.

6 0
2 years ago
On January 1, Hurley Corporation issues $500,000, 5-year, 12% bonds at 96 with interest payable on January 1. The entry on Janua
KonstantinChe [14]

Answer:

b. credit to Cash $60,000.

Explanation:

Given that:

Hurley Corporation issues the principal amount of $500,000

Time = 5 years

Rate = 12%  at 96  with interest payable on January 1

Discount on issue  =500000 × (1 - 0.96) = 20000

Annual discount  amortization= 20000/5 = 4000                  

Interest payable  = 500000× 12% =  60000

From the information given in the question; we can have a journal entry to determine the what the straight-line method will include.

So, let have a look at the table below:

Discount on issue                     20000                                      

Annual discount                        4000

amortization

                                                     Debit                            Credit

Interest expense                         64000

Discount on Bonds payable                                            4000

Interest payable                                                               60000

Now; The January 1 entries will now be as follows:

                                                    Debit                        Credit

Interest payable                           60,000

Cash                                                                                60,000

Thus; The entry on January 1 to record payment of bond interest assuming amortization of bond discount used the straight-line method will include a: <u>Credit to cash  $60,000</u>

3 0
3 years ago
The 2021 income statement of Adrian Express reports sales of $20,710,000, cost of goods sold of $12,600,000, and net income of $
Verizon [17]

Answer:

Adrian Express

1. Five Profitability Ratios:

Gross profit ratio: = 39.2%

Return on assets = 20%

Profit margin = 9.6%

Asset turnover = 2.1 times

Return on equity = 37.4%

2. I think the company is:

Less profitable

than the industry average.

Explanation:

a) Data and Calculations:

Sales Revenue        $20,710,000

Cost of goods sold $12,600,000

Gross profit                $8,110,000

Net income               $1,980,000

ADRIAN EXPRESS

Balance Sheets

December 31, 2021 and 2020

                                                                          2021                  2020

Assets

Current assets:

Cash                                                              $840,000            $930,000

Accounts receivable                                     1,775,000            1,205,000

Inventory                                                      2,245,000            1,675,000

Current assets                                          $4,860,000          $3,810,000

Long-term assets                                        5,040,000            4,410,000

Total assets                                             $ 9,900,000         $8,220,000

Liabilities and Stockholders' Equity

Current liabilities                                     $ 2,074,000          $1,844,000

Long-term liabilities                                   2,526,000           2,584,000

Common stock                                          2,075,000           2,005,000

Retained earnings                                    3,225,000             1,787,000

Total Equity                                               5,300,000           3,792,000

Total liabilities & stockholders' equity   $9,900,000         $8,220,000

Industry averages for the following profitability ratios are as follows:

Gross profit ratio 45 %

Return on assets 25 %

Profit margin 15 %

Asset turnover 8.5 times

Return on equity 35 %

Gross profit ratio: = Gross profit/Sales * 100

= $8,110,000/$20,710,000 * 100

= 39.2%

Return on assets = Net income/Assets * 100

= $1,980,000/$9,900,000 * 100

= 20%

Profit margin = Net Income/Sales * 100

= $1,980,000/$20,710,000 * 100

= 9.6%

Asset turnover = Sales/Total Assets

= $20,710,000/$9,900,000 = 2.1 times

Return on equity = Net Income/Total Equity * 100

= $1,980,000/$5,300,000 * 100

= 37.4%

6 0
3 years ago
One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors. True or false?.
MrMuchimi

True. One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors.

<h3>What is a predetermined overhead rate?</h3>

This is the term that is used to refer to the allocation rate that is used in the determination of the estimated cost of the manufacturing overhead. It is used to show in either the order of the product or that of the job.

Hence based on this question we can say that it is true because the reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors.

Read more on overhead rate here: brainly.com/question/13312583

#SPJ1

3 0
1 year ago
The price of TSC stock will be either $42 or $46 at the end of the year. Currently, T-bills yield 4.1 percent and TSC sells for
const2013 [10]

Answer:

b. $.66

Explanation:

The computation of the per share value for the one year is

Given that

Current Price = $43

Possible Prices = $42 and $46

Now

u = [($46 - $43) ÷ $43] + 1

= 1.06977

And

d = 1 - [($42 - $43) ÷ $43]

= 0.9767

And,

Risk-Free Rate = T-Bill Rate = Rf = 4.1 %

Now the up move price probability is

= [(1 + Rf) - d] ÷ [u - d]

= [(1.041) - 0.9767] ÷ [1.06977 - 0.9767]

= 0.69088

And,  

Exercise Price = $ 45

Now

If the Price is $42, so Payoff = $0

And

if the Price is $46, so Payoff =is

= ($46 - $45)

= $1

Finally the call price is

= [0.69088 × 1 + (1 - 0.69088) × 0] ÷ 1.041

= $0.66367

= $0.66

6 0
2 years ago
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