Answer:
Economies of scale
Explanation:
Economies of scale refers to reducing total costs per unit by increasing total output. All companies have certain fixed costs, some companies have higher fixed costs than others, but they always exist. When you are producing something, the cost equation is production costs = variable costs per unit + average fixed costs per unit.
Variable costs vary directly with output, while fixed costs do not, e.g. salaries can be fixed, depreciation, rent, interests, etc. The higher the output, the lower the average fixed cost per unit.
Also, sometimes variable costs can also decrease as total output increases. E.g. you can get higher discounts for purchasing larger quantities of materials and supplies.
Answer: The fair distribution of economic benefits.
Explanation:
Equity simply means giving everyone in a society equal opportunities regardless of their racial, religious, tribal or social background. In an economy if everyone present in that economy can enjoy the economic benefits, then equity has been achieved in that economy.
Answer:
effective annual rate charged by Midwest versus the rate charged by Riverside is 0.3%
Explanation:
given data:
Nominal return for Riverside = 6.5%
Nominal return for Midwest = 7.0%
Periods for Riverside = 12
Periods for Midwest = 1
By using the conversion formula.
Effective interest rate (Riverside) =![{[1+ (\frac{r_{nom}}{N})]^N} - 1](https://tex.z-dn.net/?f=%7B%5B1%2B%20%28%5Cfrac%7Br_%7Bnom%7D%7D%7BN%7D%29%5D%5EN%7D%20-%201)
![= {[ 1 + (\frac{0.065}{12})]^ {12}- 1)](https://tex.z-dn.net/?f=%3D%20%7B%5B%201%20%2B%20%28%5Cfrac%7B0.065%7D%7B12%7D%29%5D%5E%20%7B12%7D-%201%29)
= {[ 1 + 0.00542] ^ 12} - 1
= 1.0670 - 1
Effective interest rate (Riverside) = 0.067 or 6.7%
but nominal rate of interest for Mid west is 7.0%
therefore
The difference is (7.0% - 6.7%) = 0.3%
