Answer:
The correct option is D. P decreases, Q increases.
Explanation: When the marginal cost and average cost of production are reduced, this will lead to a reduction in the price of the final product or service.
Also, in introducing a technological innovation that lowered the costs of production, what the monopolist has succeeded in achieving is that the quantity of output will be driven up, as it will now cost less to produce the same unit, then more units can be conveniently produced.
Therefore, the price will reduce, but this will not be a problem because the monopolist will make up for this by increasing the quantity of output. This will ensure that the revenue generated will either remain at the same level as before, or it will surpass the level as before.
Answer: a. low supplier power due to commodity inputs
Explanation:
LOW SUPPLIER POWER in an industry is considered attractive because it creates an opportunity for larger profit margins. This is because buyers are not constrained by suppliers and are able to switch suppliers at lower costs. This drives prices down for the buyers and enables them to make a good profit on resale all else being equal.
Answer: Option (c) is correct.
Explanation:
Correct option(c): Money spent last month repairing a damaged front fender.
This is the best example of sunk cost.
Sunk costs refers to the cost that is incurred in the past and this cost cannot be recovered. This demonstrate that sunk costs should not be included in the decision making of any future projects, and this is due to the cost that cannot vary whether the project has been undertaken or not.
All the other options in the question representing the future costs.
Answer:
Inventory turnover ratio = 19.05 times
Explanation:
Quick ratio = (Current assets - Inventory) / Current liabilities
2 = (70,000 - Inventory) / 24,500
Inventory = $21,000
Inventory turnover ratio = Total sales / Inventory
Inventory turnover ratio = 400,000 / 21,000
Inventory turnover ratio = 19.05 times