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masya89 [10]
3 years ago
7

What is the range for the relative price of cloth such that the economy produces both cloth and food? From _______ to _______ .

Which good is produced if the relative price is higher than this range?
Business
1 answer:
dezoksy [38]3 years ago
4 0

The answer is explained in detail below

Explanation:

a_{KC} = 2

a_{LC} = 2

a_{KF} = 3

a_{LF} = 1

Labor, L = 2000; Capital, K = 3000  

Labour constraint,

2Q_{c} + Q_{F} \leq 2000

Capital constraint ,

2Q_{c} + 3Q_{F} \leq 3000  

Solving the equation further, we get

Q_{F} \leq 2000 - 2Q_{C}

Q_{F} \leq 1000 - \frac{2}{3} Q_{C}

  • The range for the relative price of cloth such that the economy produces both cloth and food is  2/3 and 2
  • Low cloth production → economy will use relatively more labor to  produce cloth → opportunity cost of cloth is 2/3rd units of food.
  • High cloth  production → economy dips on labor → taking capital away from food  production → raising opportunity cost of cloth to 2 units of food.  
  • If relative price of cloth lies between 2/3 and  2 units of food, the economy  produces both goods.
  • If the price of cloth decreases below 2/3 → complete  specialization in food production → low compensation for producing cloth
  • If the price of cloth  rises above 2 → complete specialization in cloth production → low compensation for producing  food
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Answer:The answer is increased their operations, the business is a conglomerate, The operating supplies is subject to wild pricing swing, operation of the business in dangerous part of the world reduces the profit.

Explanation:

Merger is the joining of two or more independent company's into one bigger and United company. The procedures for merger involved the adoption of the resolution of a merger by the board of directors of the two companies, the resolution will set out the new name to be adopted, the terms and conditions of the merger. It also includes the method of converting securities, the plan must be adopted by the two- third majority of the shareholders of both firms. Then all necessary documents will then be submitted to the registrar of company, the registrar of company will then issue a certificate of merger it then that the merger comes into existence. The merger of two companies ensures the raising of enough capital for business. It also ensures the reduction of competition between rivals,it also gives the business the opportunity to compete favourably with other well established firms. It may also ensures the diversification of their range of products and ensures the efficiency of the business.

A merger can be a conglomerate merger, a conglomerate is a merger between two or more different companies under a common ownership and runs as a single organization. The business may be doing a business which are not related before the merger and they may be operating in a different industries or in a different geographical locations.

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Oversea operation is the expansion of the business to other parts of the world with a view to gain a market share of the market and improve on the profitability of the business. When a company is operating in the dangerous parts of the world such as a country where there is terrorist activities or where there is civil war, it affects their operations and has a great effect on the company's investment in such countries such a company may be forced to close their operations in such a war ravage countries which will affect the profit of the company. It often leads to the reduction in the company's profits when the final account of the company's is prepared.

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