What happens when demand for a good increases but its supply decreases?

Pure monopolists may obtain economic profits in the long run because:a.of advertising.b.of rising average fixed costs.c.marginal

grandymaker [24]

Answer:

The correct answer is option d.

Explanation:

A pure monopoly is a type of market structure where there is only a single firm in the market which is producing a good with no close substitutes. Such a market also has high barriers to entry.

A pure monopolist can have economic profits in the long run because of barriers to entry.

In the short run, all types of market structures can have positive profits because the short run is too short for new firms to enter.

But in the long run, if there is no or relatively low barrier to entry, positive profit will attract other firms to join the market. This will reduce profits to zero.

But the firms cannot enter into a pure monopoly market, so the monopolist can earn positive economic profits in the long run.

6 0

3 years ago

What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix would be 43 percent ch

Nookie1986 [14]

Answer:

a. Anticipated level of profit.

Profit = Contribution margin of Chicken + Contribution Margin of Fish - Fixed costs

Contribution margin of Chicken

= (Selling - Variable costs) * Units sold

= ( 3.9 - 1.95) * 209,000

= $407,550‬

Contribution Margin of Fish

= (Selling - Variable costs) * Units sold

= ( 5 - 2.5 ) * 305,000

= $762,500‬

Profit = 407,550‬ + 762,500‬ - 111,000

Profit = $‭1,059,050‬

b. Break-even using weighted-average contribution margin.

Breakeven point = Fixed Cost/ Weighted Contribution margin

Weighted contribution margin

= (Proportion of chicken * Contribution margin of chicken) + (Proportion of fish * Contribution margin of fish)

= ( 43% * (3.9-1.95)) + ( 57% * ( 5 - 2.5 ))

= $2.2635‬

Breakeven point = 111,000 / 2.2635‬

= 49,039 units

c. Sales mix changes to four chicken tacos for each fish taco.

That means 0.8 chickens and 0.2 fish.

= (Proportion of chicken * Contribution margin of chicken) + (Proportion of fish * Contribution margin of fish)

= ( 80% * (3.9-1.95)) + ( 20% * ( 5 - 2.5 ))

= $2.06

Breakeven point = 111,000 / 2.06

= 53,883 units

Chicken = 80% * 53,883

= 43,106 units

Fish = 53,883 - 43,106

= 10,777 units

<em>Attached photo is similar question as yours is missing details. </em>

8 0

3 years ago

Short paragraph about Junior Technical Assistant

kati45 [8]

Answer:

Ttechnical assistants are junior-level administrative employees who report directly to the company manager or team leader. Their role is to provide both administrative and technical support for business clients or the internal team. Technical assistants work in a variety of fields including healthcare, computer science, manufacturing, and bankingg.

Explanation:

8 0

3 years ago

West Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $75,000 from the bank with a 3-

ale4655 [162]

Answer:

b. The ratio decreased

Explanation:

The current ratio is a financial performance measure that compares current assets to current liabilities, hence, in ascertaining the impact of the short-term borrowing on the current ratio, we would compute the current ratio before and after having taken the short term loan as shown thus"

current ratio=current assets/current liabilities

Before borrowing:

current ratio=$375,000/$150,000

current ratio=2.50

After borrowing:

current ratio=$375,000/($150,000+$75000)

current ratio=1.67(it has declined from earlier 2.50 to 1.67)

4 0

3 years ago

Tri-coat Paints has a current market value of $41 per share with earnings of $3.64. What is the present value of its growth oppo

sammy [17]

Answer:

the present value of its growth opportunities (PVGO) is $0.56

Explanation:

The computation of the present value of growth opportunities is shown below:

= Price per share - (Earnings ÷ required rate of return)

= $41 - ($3.64 ÷ 9%)

= $41 - $40.44

= $0.56

hence, the present value of its growth opportunities (PVGO) is $0.56

We simply applied the above formula so that the correct value could come

And, the same is to be considered

4 0

3 years ago