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3 years ago

Why should a firm stop producing when its marginal revenue is less than its average variable cost?

Business

1 answer:

Sholpan [36]3 years ago

7 0

Answer:

There is no profit so they would be loosing money.

Explanation:

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A company has set a low price on a new product it introduced. It wants to maximize its market share and attract a large number o

KATRIN_1 [288]

Answer:

A. Market-penetration pricing

6 0

3 years ago

Read 2 more answers

____ is a pattern of basic assumptions that is developed by a group as it learns to cope with problems of external adaptation an

Eduardwww [97]

Answer:

d) Organizational culture

Explanation:

Organization culture is the assumptions, beliefs, values, and ways of interactions that make an organization unique. It the organization's established ways of doing things.

Organization culture will include experiences, expectations, and philosophies that guide its members. Members of an organization express culture by the way they interact internally and with the outside world. Culture incorporates customs, attitudes, written and unwritten rules of an organization.

7 0

3 years ago

Battles, Inc. just paid an annual dividend of $1.20 a share. The dividend will not change next year and then increase by 4 perce

storchak [24]

Answer:

The price of the stock today is $24

Explanation:

The price of the stock can be calculated using the dividend discount model. The price of the stock will include discounting back future dividends.

P0 = D0*(1+g) / 1+r + [D*(1+g) / r-g] / 1+r

P0 = 1.2*(1+0) / 1+0.09 + [1.2(1+0.04) / 0.09-0.04] / 1+0.09

P0 = $24

4 0

3 years ago

If Sam's, a local watering hole, increased the price of a pint of Guinness by 20%, it estimates the number of MBA students purch

Leni [432]

Answer:

Total Revenues would increase because Demand is Inelastic

Explanation:

Demand is buyers ability & willingness to buy at a given price, time.

Elasticity of Demand is quantity demanded responsiveness to price change.

More Elastic Demand means quantity demanded responds highly to change in price. Percentage Change in Quantity Demanded > Percentage Change in Price. Elasticity of Demand [Δ%Q / Δ%P] >1 in this case. Price and Total Revenue (PxQ) are inversely related in this case ; i.e - price rise, TR fall & price fall, TR rise.

Less Elastic Demand means quantity demanded responds less to change in price. Percentage Change in Quantity Demanded < Percentage Change in Price. Elasticity of Demand [Δ%Q / Δ%P] < 1 in this case. Price and Total Revenue (PxQ) are positively related in this case ; i.e - price rise, TR rise & price fall, TR fall.

So: If Sam's Pint price change by 20% leads to demand fall by 4%, the demand is less elastic i.e < 1. Hence, Total Revenue will increase with increase in price.

6 0

3 years ago

Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil f

Stels [109]

Answer:Profit margin = 29.94%

Asset Turnover =0.50

Return on investment (ROI) =15.09%

Explanation:

Given

Sales for the year = $ 17,700,000

Net Operating Income = $ 5,300,000

Average Operating Assets = $ 35,100,000

a)Profit margin = (Net operating income/Net sales ) x 100%

= $5,300,000/$17,700,000 x 100% = 29.94%.

This shows that the Alyeska Services company has ability to turn income to profit by 29.94%

b. Asset Turnover = Total Sales/ Average Total Assets = $17,700,000/$35,100,000 = 0.50

c. Return on investment (ROI) =Net income/Total investment x 100%

= $ 5,300,000/ $ 35,100,000 x 100% =15.09%

3 0

3 years ago