Scenario 1

Suppose that the demand for milk in the United States is represented by the following equation, where P is the price of a gallon

Nostrana [21]

Answer:

a.

P = $3.50 per gallon

b.

Equilibrium Quantity = 165 million gallons

Explanation:

a.

The equilibrium price is the price at which Quantity demanded equals quantity supplied. To calculate the equilibrium price using the given equations for demand and supply, we need to equate both equations.

Equilibrium Price (P) calculation

QD = QS

200 - 10P = -10 + 50P

200 + 10 = 50P + 10P

210 = 60P

P = 210 / 60

P = $3.50 per gallon

b.

The equilibrium quantity can be calculated by inserting the value of Price (P) in any of the equation for demand or supply.

Equilibrium Quantity = 200 - 10(3.50)

Equilibrium Quantity = 200 - 35

Equilibrium Quantity = 165 million gallons

8 0

3 years ago

Suppose that in an attempt to induce citizens to conserve energy, the government enacts regulations requiring all air conditione

Nana76 [90]

Answer:

(A) Because the regulation effectively reduced the price of cool air, consumers with sufficiently elastic demand might have bought substantially more of it.

Explanation:

If the demand for energy services remains constant, improving energy efficiency will reduce energy consumption and carbon emissions. However, many efficiency improvements do not reduce energy consumption by the amount provided by simple engineering models. This is because they make energy services cheaper and therefore increases the consumption of those services.

For example, since low-fuel vehicles make travel cheaper, consumers can choose to drive further, thus offsetting some of the possible energy savings. Similarly, an extensive historical analysis of improvements in technological efficiency has conclusively demonstrated that improvements in energy efficiency were almost always overcome by economic growth, which resulted in a net increase in resource use and associated contamination.

3 0

3 years ago

For many years, Romania promised all export-oriented foreign investors a five-year tax holiday if they set up a factory in Roman

arlik [135]

Answer:

d, regulatory change

Explanation:

Romania underwent a regulatory change as soon as it revoked the tax holiday it initially promised export-oriented investors.

The reasons for doing that is best known to the Romanian government but the important thing here is that when there is a change in regulations or priviledges, it is termed a regulatory change.

8 0

3 years ago

Sheridan Company can produce 100 units of a component part with the following costs: Direct Materials $22000 Direct Labor 6500 V

Karo-lina-s [1.5K]

Answer:

If the company makes the component, it will save $2,500.

Explanation:

To determine which option is better, we need to calculate the total cost of each option and choose the cheapest one. We will take into account the avoidable fixed overhead cost, thus the rest is inconsequential to the decision-making process.

Make in-house:

Direct material= $22,000

Direct labor= $6,500

Variable overhead= $20,000

Avoidable fixed overhead= $4,000

Total cost= $52,500

Buy:

Total cost= $55,000

If the company makes the component, it will save $2,500.

4 0

3 years ago

Marley Company has the following information for March: Sales $912,000 Variable cost of goods sold 474,000 Fixed manufacturing c

iogann1982 [59]

Answer:

Results are below.

Explanation:

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).

Manufacturing contribution margin= 912,000 - 474,000

Manufacturing contribution margin= 438,000

Now, the total contribution margin:

Total contribution margin= manufacturing contribution margin - Variable selling and administrative expenses

Total contribution margin= 438,000 - 238,100

Total contribution margin= $199,900

Finally, the income statement:

Sales= 912,000

Total Variable cost= 474,000 + 238,100= (712,100)

Total contribution margin= 199,900

Fixed manufacturing costs= (82,000)

Fixed selling and administrative expenses= (54,700)

Net operating income= 63,200

5 0

3 years ago