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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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A small producer of machine tools wants to move to a larger building, and has identified two alternatives. Location A has annual
xenn [34]

Answer:

Location A is superior to up 40 units. From there Location B is better

Explanation:

Giving the following information:

Location A:

Fixed costs of $100,000

Variable costs of $13,000 per unit.

Location B:

Fixed costs of $300,000.

Variable costs of $8,000 per unit.

The finished items sell for $18,000 unit.

Contribution margin Location A= 18000-13000= 5,000

Contribution margin Location B= 18000 - 8000= 10,000

Income formula location A= 5000*Q - 100000

Income formula location B= 10000*Q- 300000

5000*Q - 100000= 10000*Q - 300000

200000= 5000Q

Q= 40 units

Location A is superior to up 40 units. From there Location B is better.

6 0
4 years ago
Hat Tricks Company (HTC) is a Buffalo, New York, manufacturer of hats and gloves. Recently, the company purchased a new machine
saul85 [17]

The selling price per hat is mathematically given as

S=$62

<h3>What is the selling price per hat?</h3>

Direct labor hours required to produce first 100 hats=10hr

Direct labour cost =20hr*60$/hour = $1200

Other Direct cost =100hats*19$/hat = $1900

Total Direct cost. = $3100

Selling price is 200% of Direct production cost

$3100*200% = $6200

The selling price per hat = $6200 / 100hats

The selling price per hat = $62

In conclusion, The selling price per hat = $62

Read more about selling price

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3 0
2 years ago
Pete Morton is planning to go to graduate school in a program of study that will take three years. Pete wants to have $13,000 av
podryga [215]

Answer:

$34,116

Explanation:

To determine how much Pete would should save, we have to determine the present value of $13,000

Present value is the sum of discounted cash flows

present value can be calculated with a financial calculator

Cash flow each year from year 1 to 3 = $13,000

I = 7%

Present value = $34,116

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

7 0
3 years ago
He Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $830,000,
omeli [17]
Blank blank blank to the power of two
3 0
2 years ago
he exchange rates of the euro (€ ) and the Japanese yen (¥) relative to the U.S. dollar ($) are listed as follows: Spot Rate Eur
bearhunter [10]

Answer:

€ 0.004871

Explanation:

Direct quote is a method of quoting a foreign currency per one unit of domestic currency.

Indirect quote is a method of quoting a foreign currency in which price of foreign currency is expressed in domestic currency.

In the given question to find the units Euro per Yen we need to divide the Euro per dollar rate with the Yen per dollar rate.

Euro 0.5547 / $1

Yen 111.83 / $1

Euro per Yen = 0.5547 / 111.83 = €0.004871 per ¥1

5 0
3 years ago
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