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Mariana [72]
3 years ago
5

The allocatively efficient quantity of product Z for the whole market is 2 million units. At that quantity, the demand for Z is

at $5 and the average total cost for its single supplier is $7. The average total cost does not fall to $5 until 3.5 million units. Based on this data, the market for product Z is
Business
1 answer:
makkiz [27]3 years ago
3 0

Question Completion:

ANSWER CHOICES

A.  operating with decreasing returns to scale

B.  a natural monopoly

C.  a legal monopoly

D.  monopolistically competitive

E.  productively efficient

Answer:

Based on this data, the market for product Z is:

A. operating with decreasing returns to scale.

Explanation:

For the Average Revenue (Price) to equal the Average Total Cost (ATC) and enable the firms operating in the market to break-even, the firms must increase their production units from 2 million to 3.5 million units.  The conclusion that the market for product Z is operating with decreasing returns to scale for a single supplier is because it will take a 75% increase in production for the average total cost to fall from $7 to $5 for the single producer.  In other words, the percentage increase in production does not result in a proportionate decrease in average total cost.

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Answer: Peripheral route.

Explanation:

The method of convincing consumers to purchase a product based on positive experience of past consumers with the product and not necessarily highlighting the product's quality is making use of the Peripheral route to convince consumers. The peripheral route makes use of indirect signals to convince a person about an item and not necessarily the main qualities that item possess.

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Cost standards for one unit of product no. C77: Direct material 3 pounds at $2.50 per pound $ 7.50 Direct labor 5 hours at $7.50
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Answer:

Standard hours allowed= 39,000

Explanation:

Giving the following information:

Standard direct labor hours per unit= 5 hours

Actual results:

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One potential drawback of just-in-time (jit) production is that
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One potential drawback of just-in-time (jit) production is that the company would face disruptions in the supply chain if the supplier of raw materials could not deliver the required materials on time.

<u>Explanation:</u>

The management strategy that aligns raw-material orders from suppliers directly with production schedules. This strategy is employed in many companies to reduce the wastage and to increase the efficiency. It requires an accurate forecast of the demand by the production team of the firm so that the production requirements can be initiated accordingly.

In spite of all the advantages like reducing the inventory costs (like warehousing, etc.) or easily spotting production mistakes, great focus on quality, etc, this method also has the following disadvantages,

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If the CEO of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager),
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Answer:

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All the rest of the option in the question results in less efficiency of the company's division. In order to achieve a better grade Option A is the only choice.

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Answer:

Explanation:

Please see attached file

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