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My name is Ann [436]
3 years ago
8

Business do not maximise output from the given inputs​

Business
1 answer:
Ganezh [65]3 years ago
4 0

Answer:

Allocative inefficiency.

Explanation:

Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.

In Economics, there are four (4) main factors of production and these are;

I. Land.

II. Labor (working).

III. Capital resources.

IV. Entrepreneurship.

When these aforementioned factors of production are combined effectively and efficiently, they can be used for the manufacturing or production of goods and services to meet the unending requirements or needs of the consumers.

Basically, there are two (2) types of inefficiency associated with the production of goods and services to meet the unending requirements or needs of consumers, these includes;

1. Technical (productive) inefficiency: it occurs when a company or business firm produce goods and services that consumers do not want.​ This is typically as a result of the incorrect and inefficient allocation of scarce resources by a business firm or entity.

2. Allocative inefficiency: it occurs when a company or business firm do not maximise output from the given inputs such as raw materials, capital, etc. Thus, it arises when businesses fail to increase the level of their production or productivity from a number of given inputs.

Hence, when a business do not maximise output from the given inputs, it is referred to as an allocative inefficiency.

<em>In conclusion, allocative inefficiency typically occurs when the price of a good or service isn't equal to its marginal cost i.e P ≠ MC.</em>

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Bundles of cedar shakes produced and sold 360,000 Sales revenue $ 2,412,000 Variable manufacturing expense $ 1,170,000 Fixed man
konstantin123 [22]

Answer:

0.343

Explanation:

Calculation for what The company's contribution margin ratio is closest to

First step is to calculate the Contribution margin using this formula

Contribution margin = Sales – Variable expenses

Let plug in the formula

Contribution margin= $2,412,000 – ($1,170,000 + $414,000)

Contribution margin= $2,412,000 – $1,584,000

Contribution margin= $828,000

Now let calculate the Contribution margin ratio using this formula

Contribution margin ratio = Contribution margin ÷ Sales

Let plug in the formula

Contribution margin ratio = $828,000 ÷ $2,412,000

Contribution margin ratio =0.343

Therefore The company's contribution margin ratio is closest to 0.343

4 0
2 years ago
What are some risks and how do you plan to reduce or eliminate them when having a business​
lara [203]

Explanation:

1. Buy insurance: Though insurance is an expenses, it safe guards you and yours business from huge loss.

2. Income from multiple sources: Always do not depend on single income. Make sure that income comes from multiple sources so that you can make your business alive.

3. Have a savings: Entrepreneurs should save money as how much as they can. We cannot know when there will be a profit and when there is a loss. We can only forecast to a particular extent.

4. Limits on Loan: Keep your loans manageable: Do not step into huge loans where it will be difficult for you to manage when there is a sudden lose.

6 0
3 years ago
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Al contracted to sell his house to bev. subsequently, they both changed their minds and agreed to cancel the contract. the contr
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