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3 years ago

Monopolies can earn positive economic profits in the long run while monopolistically competitive firms cannot due to

Business

1 answer:

inessss [21]3 years ago

4 0

Answer:

barriers to entry in monopoly but not in monopolistic competition.

Explanation:

Imagine a situation where a monopolistically competitive firm is doing very well and is able to earn economic profit (profits higher than normal) in the short run. Since this company is earning higher than normal profits, other companies will enter the market and start competing against them hoping to get a piece of that abnormally high gain. As more competitors enter the market, economic profits will start to decrease until finally they are eliminated.

Since monopolies do not face competition, they can earn economic profits in the long run.

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Jack's Construction Co. has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yield

zheka24 [161]

Answer:

WACC 10.42614%

Explanation:

<u>First we use CAPM to solve for the cost of equity</u>

$Ke= r_f + \beta (r_m-r_f)$

risk free 0.04

market rate

premium market (market rate - risk free) 0.08

beta(non diversifiable risk) 1.1

$Ke= 0.04 + 1.1 (0.08)$

Ke 0.12800

Then we calculate the WACC (weighted average cost of capital)

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

D 80,000 bonsd x 1,000 = 80,000,000

E 4,000,000 shares x 40 = 160,000,000

E+ D 80,000,000 + 160,000,000 = 240,000,000

equity weight: 2/3

liability weight: 1/3

Ke 0.128

Equity weight 0.6667

Kd 0.086

Debt Weight 0.3334

t 0.34

$WACC = 0.128(0.6667) + 0.086(1-0.34)(0.3334)$

WACC 10.42614%

6 0

3 years ago

Compute and interpret the contribution margin ratio using the following data: sales, $5,000; total variable cost, $3,000.Interpr

Dmitriy789 [7]

Answer:

0.4 or 40%

Explanation:

The formula for Contribution Margin Ratio is:

[TS - TVC] / TS

Where TS = Total Sales

TVC = Total Variable Cost

Applying the formula,

[5,000 - 3,000] / 5,000 = 2000/5000 = 0.4

Turning this value to a percentage, 0.4 × 100 = 40%

The interpretation of this is that for every item sold, 40% of the sales price is available to cover fixed costs.

Remember: The addition of fixed cost to variable cost = total cost

7 0

3 years ago

SFX Paintball Games, Inc., and Truck & Trailer Delivery Corporation sign an agreement that provides for the payment of "$1,0

Jlenok [28]

Answer:

A liquidated damages clause.

Explanation:

The liquidated damage clause is the clause in which the party who has breach the contract or who has delay the completion of the contract has to pay the damages for the liquidation of the contract

here in the given situation, since the company has an agreement with the other party and if anyone party breach the contract then the price they paid would be $1,000 approx

Therefore this represents the liquidated damages clause

6 0

3 years ago

2. Pure Water is considering buying new production equipment. The new equipment will increase fixed costs by $200,000 per year a

BARSIC [14]

Answer and Explanation:

The computation is shown below:

But before that we need to do the following calculations which are shown below:

The Contribution per unit of faucet is

= $75 - $15

= $60

And, the Contribution per unit of pitcher filter is

= $100 - $30

= $70

Now Contribution per unit in present sales mix is

= [($60 × 2) + ($70 × 3)] ÷ 5

= ($120 + $210) ÷ 5

= $66 per unit

And

The Fixed cost is

= $1,000,000 + $200,000

= $1,200,000

Now

Break even units is

= $1,200,000 ÷ $66 per unit

= 18,181.81 units

For faucet, it is

= (18,181.81 × 2) ÷ 5

= 7,272.72 units

For pitcher filter, it is

= (18,181.81 × 3) ÷ 5

= 10,909.086 units

4 0

3 years ago

Consumerism is a widely accepted social movement. Proponents of this movement believe that _____ is a right of all consumers. a.

larisa86 [58]

Answer:

b. the right to be informed

Explanation:

Consumerism is a movement that aims to protect consumer's interests. The movement promotes truthful packaging, fair trade practices, truthful product guarantees, truthful advertising etc. These attributes will enable consumers to make informed decisions before purchasing products. Based on the above, option b is the correct answer.

7 0

3 years ago