Answer: debit to Stock Investments for $55,080.
Explanation:
As this is an investment in another company, it will count as an asset which means that when it increases, the account will have to be debited. It will therefore be debited for $55,080 to show the investment.
Cash will decrease by the same amount which means that it will have to be credited because assets are credited when they decrease.
Dr Stock Investments $55,080
Cr Cash $55,080
Answer:
Based on the EMV value, the best choice is to use Two suppliers
Explanation:
Is necessary to consider different amount of suppliers and evaluate the cost. We will choose the number of suppliers which offers a lower cost.
- EMV1 = cost of shutdown*super event risk + cost of shutdown*unique event risk + cost of managing supplier = 480000*.02 + 480000*0.05+16000 = 9600 + 24000 + 16000 = $ 49600
- EMV2 = cost of shutdown*super event risk + cost of shutdown*unique event risk of each supplier*unique event risk of each supplier + cost of managing 2 suppliers = 480000*.02 + 480000*0.05*.05+16000*2 = 9600 + 1200 + 16000*2 = $ 42800
- EMV3 = cost of shutdown*super event risk + cost of managing 3 suppliers = 480000*.02 + 480000*0.05*.05+16000*2 = 9600 + 16000*3 = $ 57600
Based on the EMV value, the best choice is to use Two suppliers
Answer:
$3,750
Explanation:
at $25 per sheet of plywood:
total demand = 800 - (10 x 25) = 800 - 250 = 550
total supply = (50 x 25) - 1,000 = 1,250 - 1,000 = 250
the equilibrium price is:
800 - 10P₁ = 50P₁ - 1,000
1,800 = 60P₁
P₁ = 1,800 / 60 = 30
the equilibrium quantity (Q₁) is:
Q₁ = 800 - (10 x 30) = 800 - 300 = 500
at 250 units, the price should be:
250 = 800 - 10P₂
10P₂ = 550
P₂ = $55
total deadweight loss = 0.5 x (P₂ - P₁) x (Q₂ - Q₁) = 0.5 x ($55 - $25) x (250 - 500) = 0.5 x $30 x -250 = -$3,750
Mutual interdependence means that each oligopolistic firm <span>must consider the reactions of its rivals when it determines its price policy.
An oligopoly has a limited amount of competition because there is a small amount of producers or sellers in the market. Because there is a small amount, they consider the reactions someone else may have if they change the the price policy. These firms can not keep each other from having a large influence over the market.
</span>
