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gavmur [86]
3 years ago
13

If natural monopolies are regulated to produce where there is a normal profit, they produce where Group of answer choices price

equals average total cost. marginal revenue equals marginal cost. price equals marginal cost. marginal revenue equals average total cost. PreviousNext

Business
1 answer:
daser333 [38]3 years ago
8 0

Answer:

price equals average total cost.

Explanation:

Normal profit exists basically when economic profit = $0. Economic profit is not the same as accounting profit. Accounting profit just considers revenues - actual expenses. While economic profits considers accounting profit - implicit or opportunity costs. Opportunity costs are the extra costs or benefits lost from choosing one activity or investment over another alternative.

A company will maximize its accounting profits when economic profit = $0. This will happen when marginal revenue = marginal costs. All companies should try to sell at this level of output and price, but since the monopoly is being regulated, the price will probably be set considering total costs, not marginal costs.

In the attached graph you can find the point that maximizes profit at (Q,P), but the marginal cost then increases more than total costs. That is why regulators will probably use the average total cost as reference for setting the output for a monopoly.

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Babak owns a sports practice facility called Boston Batting Cages in Boston, Massachusetts. During the first year of operation,
lions [1.4K]

Answer:

$8000

Explanation:

They have to pay $8,000 as an implicit costs.

The implicit expenditure is the advantage of the right to use the personal resources of a company that is not listed as actual, distinct expenditures.

 Computation of Implicit cost for the Boston Batting Cage :

Implicit cost = Labor + maintenance + electricity

= $5,000 + $2,000 + $1,000

= $,8000

7 0
3 years ago
When a person gains a benefit from a previously unauthorized act of an agent and does not deny the authority to act after learni
professor190 [17]

Answer:

The answer is agency by Ratification

Explanation:

An agency by ratification is created when a person gains some benefit from a previously unauthorized act of an agent and the person, upon learning of the act, does not deny that the agent had the authority to perform the act.

4 0
3 years ago
Van has saved $30 per week to buy a new Blu-Ray player. He compares two different models: a Panaview that is priced at $130 and
creativ13 [48]

Answer:

Money is served three purposes- unit of account, store of value and medium of exchange

Explanation:

In this question, we are to identify the role money plays in each of the following parts of the story.

Money is used to measure the valueof good in money unit, so the values can be compared easily.

In the first case, Van is comparing between value of goods. the money serves as unit of account.

Money is used as medium of echange to avoid the difficulty arising out of goods to goods exchange.

In the second case, Van is exchanging $140 for the DVD, money is serving as medium of exchange.

Money also has store of value, it can be saved and exchanged for goods over time.

In third case, Van is saving money for future exchange, money is serving its store of value function.

3 0
3 years ago
Mr. Isaac is lending Gh₵20000 to Mr. Hayford, to be repaid over five years. Mr. Isaac would like to effect a policy on Mr. Hayfo
Alla [95]

Question:

Mr. Isaac is lending Gh₵20000 to Mr Hayford, to be repaid over five years. Mr Isaac would like to effect a policy on Mr Hayford’s life to cover the loan should Mr Hayford die. Mr Hayford would like to insure Mr Isaac’s life just in case he dies and the beneficiaries of his will insist that the loan be repaid early.

(a)​ What is the extent of insurable interest in each case?

(b) ​Consider any necessary action if the loan was later repaid earlier than anticipated what happens to the policy?

Answer:

To answer the question (a), one must first understand the concept of <em>Insurable Interest.</em>

A policyholder is said to have an insurable interest in a subject matter whenever the subject matter of a contract provides some financial gain to them and would lead to a financial loss if damaged, destroyed, stolen or lost.

For example, if I purchase a car for my use for $10,000, theft of or damage to that car will translate to financial loss to me. Therefore, I have an insurance interest in the car. This qualified me to Insure the car against loss arising from any form of insurable damage, or theft.

In question (a) there are two cases.

<em>Case I - Mr Isaac would like to effect a policy on Mr Hayford’s life to cover the loan should Mr Hayford die.</em>

Mr Isaac, in this case, has full insurable interest on Mr Hayfords life. If Mr Hayford dies,  Mr Isaac will be put in a financial loss to the tune of Gh₵20000.

<em>Case II - Mr Hayford would like to insure Mr Isaac’s life just in case he dies and the beneficiaries of his will insist that the loan be repaid early. </em>

Mr Hayford does an insurable interest on Mr Isaac's life. This insurable interest arises due to the possibility (as given in the question) that Isaacs family have the power to request for the loan earlier than it ought to have been paid.

The insurable interest arises because paying back the loan earlier than anticipated, may put Mr Hayford in financial distress and may lead to financial and economic loss. If the loan is meant for the running of his business, the business may fold up, and he may forfeit all the assets of the business.

In a real-life scenario, this can all be prevented by ensuring that the terms of the loan are documented in a contract which must be ratified by both parties. In this contract, clauses preventing the lender from cutting short the tenure of the loan can be inserted. This is less expensive and easier to administer.

(b) In each of the cases above, if the loan is paid back earlier than anticipated:

i. Under duress from the family: The provision of the policy protecting the interest of Mr. Hayford kicks in and makes good the loss to mitigate it and terminates afterwards.

ii. By volition by Mr Hayford: The policy terminates immediately as the insurable interest he has on Mr Isaac's life becomes extinct.

Cheers!

6 0
3 years ago
There is low interdependence, performance ambiguity, and costs of control in firms pursuing Multiple Choice a localization strat
amm1812

Answer:

Option A (localization strategy) is the right approach.

Explanation:

  • Localization strategy seems to be a method of transforming services or products to something like a unique language, culture as well as the appropriate "look-and-feel" community.
  • Preferably a good or product is designed such that it is fairly sufficient to accomplish this strategy. And it is, therefore, possible to obtain an internationalized products.

Certain options given aren't relevant to the contexts in question. So choice A is indeed the correct way to do things.

8 0
3 years ago
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