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LuckyWell [14K]
3 years ago
6

Company A produces paper and sells it to Company B for a total of $183. Company B uses the paper to make books and then sells th

e books to consumers for a total of $342.What is the value of GDP in this simple economy?
Business
1 answer:
tester [92]3 years ago
4 0

Answer:

$159

Explanation:

Value = cost of books - cost of paper

342 - 183 = 159

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

the cost of paper is not included because it is an intermediate good and not a final good.

An intermediate good is a good that is used in the production of the final good.

If it is added to GDP, it would result in double counting

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Burnwood Tech plans to issue some $80 par preferred stock with a 7% dividend. A similar stock is selling on the market for $95.
anyanavicka [17]

Answer:

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First step is to calculate the Annual Dividend Payment on Preferred Stock

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Cost of Preferred Stock = [($80 * 7%) / $95(1-0.05)]

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Therefore the cost of the preferred stock is 6.20%

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Monopolistic competition has a downward sloping demand curve. Thus, just as for a pure monopoly, its marginal revenue will always be less than the market price, because it can only increase demand by lowering prices, but by doing so, it must lower the prices of all units of its product. Hence, monopolistically competitive firms maximize profits or minimize losses by producing that quantity where marginal revenue equals marginal cost, both over the short run and the long run.

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