FALSE
In some industries, high switching costs can act as an important barrier to entry.
Barrier to entry is defined as conditions which prevent companies to enter in a market. It limit the competition as no new firm easily join the market.
Some examples of the barrier to entry is high start-up cost, government regulations, high customer switching cost.
Business earn its profit from customers only , if customers will switch to the substitute product , then company will incur high loss. It will act as a barrier to entry.
It protects the market share. Because if no new comer join then market share will not get shared with other new comer.
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Answer: B) If the equilibrium quantity of cheeseburgers increases, then the demand shift in the market for cheeseburgers must have been larger than the supply shift.
Explanation:
1. An increase in the price of cheeseburgers is due to the fact that several burger joints in the area have recently gone out of business. This will shift the supply curve for cheeseburgers to the left, driving up the price of cheeseburgers and reducing the quantity.
2. An increase in the price of Calzones at local pizza parlors lead to an increase in the demand for Cheese burgers as cheese burgers and calzones are substitutes to each other. So, when price of calzones rise, consumers shift demand to cheeseburgers. This will lead to a rightward shift in the demand for cheese burgers as a result the price and quantity of cheese burgers increase.
3. A decrease in supply due to burger joints going out of business shift the supply curve to the left. Increase in the price of calzones increase demand for burgers shifts the demand curve to the right. Both these will increase the price of cheeseburgers but the effect on quantity cannot be determine as depends on the magnitude of the shift in the two curves.
If demand shifts more than supply, equilibrium quantity increases. If supply shifts more than demand, equilibrium quantity decreases.
Thus, B is correct.
Balance Sheet and income statement account include supplies, amount payable for interest and salaries.
<h3>
What is a Balance Sheet?</h3>
Balance Sheet are financial statement that shows a company's assets and liabilities.
The pair of balance sheet and income Statement account that can require adjustment include,
- Supplies of goods and services
- Unearned Revenue
- Salaries and Wages Payable
- Interest Payable
- Income Tax Payable Balance
This adjustment is dependent on the amount of increase or decrease that is made on the account.
Therefore, Balance Sheet and income statement account include supplies, amount payable for interest and salaries.
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Answer: Option B
Explanation: In simple words, lean manufacturing refers to the manufacturing process in which the production firm focuses on minimizing the waste that occurs in the production process and also increases the productivity at the same time.
This system was first implemented in Japanese manufacturing industry and lead to decrease in cost of production significantly. Such kinds of manufacturing is highly evident in industries prancing goods such as clothes, shoes etc.
This strategy also decreases the production cycles and increase the respond time of the firm to the market.
Answer:
The company's WACC is closest to 11.8%
Explanation:
Weighted Average Cost of Capital (WACC) is the Cost to the Company arising from the sources of finance. It shows the return required by holders of permanent capital in the company.
WACC = Cost of Equity x Market Weight of Equity + After Tax Cost of Debt x Market Weight of Debt
where,
Cost of Equity = 16.0 %
Market Weight of Equity = 3,000 ÷ 5,000 = 0.60
Market Weight of Debt = 2,000 ÷ 5,000 = 0.40
After Tax Cost of Debt = interest x ( 1 - tax rate) = 8.0% x (1 - 0.30) = 5.60%
therefore,
WACC = 16.0% x 0.60 + 5.60% x 0.40 = 11.84 %
