The correct answer is the matching principle.
This principle stipulates that every expense that a company makes has to match with the revenues it brought to the company within the same accounting period when both of them happened. So, basically, a company has to have a list of expenses and profits they gained in the same period.
Answer:
Based on the calculation made, the indicated value is $3,889.86014
Explanation:
Using direct capitalization method, indicated value can be calculated using the formula below:
Value = Annual net operating income NOI/Capitalization rate
= $44500/11.44%
Value= $3,889.86014
Based on the calculation made above, the indicated value is $3,889.86014.
Answer:
(a) 0.667 (b) The Lerner index helps in estimating of the market power of a firm. it measures the percentage markup that a firm is able to charge.
The conditions where this market power last in the long-run are; the pricing power, Factor mobility, Barrier to entry or exist.
Explanation:
Solution
Given that:
(A) The Lerner index is computed below:
Lerner index = (P-MC)/P
Thus,
($15-$5.00)/$15
=10/15
= 0.667
(B) The Lerner index assist in measuring of the market power of a firm. it measures the percentage markup that a firm is able to charge.
Index spans from a low value (0) to a higher value of (1)
When a firm has a higher value of index, it is able to charge over it;s marginal cost and thus has a greater monopoly power
Other conditions where market power last in the long run is as follows:
- The pricing power
- Factor mobility
- Barrier to entry or exist
Answer: It should shot down immediately.
Explanation:
If the market price is equal to average cost at the profit-maximizing level of output, then the firm is making zero profits. If the market price that a perfectly competitive firm faces is below average variable cost at the profit-maximizing quantity of output, then the firm should shut down operations immediately.
Answer:
they help you focus on how to get to your long term goal, like how you focus on the drive not the destination.
Explanation:
