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Natali [406]
3 years ago
6

Suppose a third firm enters the market. If they all don't cheat, then they split the profits three ways so that each firm gets 2

million. If one firm cheats, he steals profits from the other two firms and earns 5.5 million while the other firms incur losses of 1 million. Will it be harder or easier to sustain cooperation?
Business
1 answer:
dmitriy555 [2]3 years ago
7 0

Answer: Harder to sustain cooperation

Explanation:

When the number of firms in an oligopolistic market increases as is the case here, cooperation becomes harder because profits become smaller so companies start to become more selfish.

Also in this scenario, the cheating firm has the incentive to do so because the profit is so much higher than sharing so companies will always be looking to cheat in order to make this profit. The other firms would reply by reducing prices and all of them would suffer.

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The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such a
adelina 88 [10]

Answer: Income statement.

Explanation:

Also known as the profit and loss account, the income statement is a financial record that shows the amount of money that a business establishment receives and spends during a certain period (week, month or year). The profit or loss is determined by subtracting the expenses from the income during a period.

6 0
3 years ago
Lee Financial Services pays employees monthly. Payroll information is listed below for January 2018, the first month of Lee's fi
solniwko [45]

Answer and Explanation:

1. The computation is shown below:

As we know that employee taxes involved the social security tax, medicare tax and the income tax

Social security tax

= Gross pay × 6.2%

= $470,000 × 6.2%

= $29,140

Medicare tax

= Gross pay × 1.45%

= $470,000 × 1.45%

= $6,815

And,

Income tax withheld = $94,000

Now payroll taxes involved social security tax, Medicare tax, Federal unemployment tax, and state unemployment tax.

Social security tax

= Gross pay × 6.2%

= $470,000 × 6.2%

= $29,140

Medicare tax

= Gross pay × 1.45%

= $470,000 × 1.45%

= $6,815

Federal unemployment tax is

= Gross pay × 0.6%

= $470,000 × 0.6%

= $2,820

State unemployment tax

= Gross pay × 5.40%

= $470,000 × 5.40%

= $25,380

2. Now the journal entries are

On January, 2018

Salaries wages expense  $470,000

       To Withholding income tax payable  $94,000

       To Social security tax payable  $29,140

       To Medicare tax payable $6,815

       to Salaries and wages payable $340,045

(being salaries and wages expense is recorded)

On Jan 2018

Payroll tax expense  $64,155

      To Social security tax payable $29,140

      To Medicare tax payable $6,815

      To Federal unemployment tax payable $2,820

      To State unemployment tax payable $25,380

(being tax liabilities is recorded)  

 

 

8 0
2 years ago
The ________ measures the return on owners' (both preferred and common stockholders) investment in the firm.
tatyana61 [14]

Answer:

C) return on equity

Explanation:

The return on equity determines the financial performance of the company. It could be calculated by dividing the net income from the owners equity as according to the accounting equation, the owners equity could be find out by deducting the liabilities from the assets

So here the equity could be of both types i.e. common and preferred

Therefore the option c is correct

5 0
3 years ago
Price controls can cause _____.
shtirl [24]
Price control causes shortages and surpluses depending on whether it is the maximum or minimum price control. if it is maximum, there will be surpluses and if it is minimum, there will be shortages due to how much people can afford.
4 0
3 years ago
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If a business has unhappy customers or unhappy employees, it is likely that the business will also make ________
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The business would make c. less money
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