Answer:
Small
Explanation:
Fixed costs are the costs that do not change when output level changes, while variable costs are costs that change as output quantity changes.
When a production process is capacity constrained, it implies that there is a factor that does not allow it to produce more output. Examples of such factors are minor bottlenecks, constrained designs and resources, and others.
A process is said to be efficient when it can avoid waste of resources in producing desired output.
Efficiency improvement therefore occurs when more output can be produced with less resources.
In the question, given that the process is currently capacity-constrained, efficiency improvement will result in producing more output at higher costs because of high variable costs despite that the process has low fixed costs.
As a result, the impact of an efficiency improvement will be small because producing more output will result in incurring higher cost due to high variable costs that change as quantity of output changes. That is, the impact of efficiency improvement will be small because high variable costs with low fixed cost will result in higher production cost.
Answer:
The correct answer is option D.
Explanation:
A monopoly firm is neither productively nor allocative efficient. The reason behind this is that it does not utilize the resources efficiently and produces below the socially optimal level of output.
Unlike perfect competition, which produces at the point where price equals marginal cost, a monopolist produces at the point where the price is greater than marginal cost.
This inefficiency is visible through the decrease in consumer surplus and deadweight loss. The difference between socially optimal level of output and monopoly output also represents inefficiency. The value of the goods and services that could have been made if monopolist chose to produce at a socially optimal level also shows inefficiency.
Answer:
Explanation:
A. John’s basis in the 1,000 shares of Intel stock is $45,750.
is the purchase price of $30,000 (i.e., 44 × $1,000) plus the $750 commission paid to the broker.
b.On the sale, John realizes $62500. This is the sales price of $63500 (i.e., 1,000 × $63.50)minus the transaction fee of $1,000.
c.John’s gain on the sale is $16,750 which is the amount realized minus his adjusted basis (i.e., $62500 – 45,750). The gain is a long-term capital gain because John held the stock for more than a year before selling
