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Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will:

forsale [732]

Answer:

attract other firms to enter the industry, causing the existing firms' profits to shrink.

Explanation:

Monopolistic competition can be defined as an imperfect competition where many producers or organizations sell differentiated products that are not perfect substitutes. Examples of firms or organizations engaging in a monopolistic competition are restaurants, shoes, clothing lines etc.

Generally, a monopolistic competitive market is characterized by the presence of large numbers of firm (producers) and a very low entry barrier.

Hence, in a monopolistic competition, firms have a degree of control over price, make independent decisions and can freely enter or exit the market in the long-run. Therefore, these firms combine elements of both monopoly and competition.

When a monopolistically competitive firm is in long-run equilibrium marginal revenue is equal to marginal cost (MR = MC) . This ultimately implies that in the long-run, firms engaging in monopolistic competitive market are often going to manufacture the quantity of goods where the marginal cost (MC) curve intersect with the marginal revenue (MR). Also, the price set would be greater than the minimum average total cost (ATC).

Hence, assuming that in a monopolistically competitive industry, firms are earning economic profit. This situation will attract other firms to enter the industry, causing the existing firms' profits to shrink.

6 0

3 years ago

Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payro

Roman55 [17]

Answer:

Marcelino Co.

Journal Entries:

Debit Raw materials $500,000

Credit Accounts Payable $500,000

To record the purchase of raw materials on credit.

Debit Factory payroll $363,000

Credit Cash $363,000

To record payment for factory payroll.

Debit Work in Process:

Job 307 $135,000

Job 307 $220,000

Job 308 $100,000

Credit Raw materials $455,000

To record direct materials used in production

Debit Work in Process:

Job 307 $42,500

Job 307 $75,000

Job 308 $52,500

Credit Factory overhead $170,000

To record overhead applied.

Debit Factory overhead $175,000

Credit Raw materials $50,000

Factory payroll $23,000

Factory rent $32,000

Factory utilities $19,000

Factory equipment depreciation $51,000

To record actual factory overhead costs.

Debit Finished Goods Inventory $828,500

Credit Work in Process:

Job 306 $321,500

Job 307 $507,000

To record the cost of finished goods transferred.

Debit Cost of goods sold $321,500

Credit Finished goods inventory $321,500

To record the cost of goods sold.

Debit Cash $635,000

Credit Sales Revenue $635,000

To record the receipt of cash for sales.

Debit Cost of Goods Sold $5,000

Credit Factory overhead $5,000

To record underapplied overhead.

Explanation:

a) Data and Calculations:

Raw materials inventory, March 31 = $80,000

Raw materials $500,000 Accounts Payable $500,000

Factory payroll $363,000 Cash $363,000

Overhead costs incurred in April :

Indirect materials $50,000 Raw materials $50,000

Indirect labor $23,000 Factory payroll $23,000

Factory rent $32,000 Cash $32,000

Factory utilities $19,000 Cash $19,000

Factory equipment depreciation $51,000 Accumulated depreciation $51,000

Total overhead incurred = $175,000

Predetermined overhead rate = 50% of direct labor cost

Sale of Job 306 for cash = $635,000

Job 306 Job 307 Job 308 Total

Balances on March 31

Direct materials $29,000 $35,000 $64,000

Direct labor 20,000 18,000 38,000

Applied overhead 10,000 9,000 19,000

Costs during April

Direct materials 135,000 220,000 $100,000 $455,000

Direct labor 85,000 150,000 105,000 340,000

Applied overhead 42,500 75,000 52,500 170,000

Total costs $321,500 $507,000 $257,500 $1,086,000

Status on April 30 Finished (sold) Finished (unsold) In process

3 0

3 years ago

Restaurant A uses 60 bags of potatoes each month. The potatoes are purchased from a supplier for a price of $80 per bag and an o

iVinArrow [24]

Answer:

D. Decreases from 30 to 28.5 bags

Explanation:

The computation of the economic order quantity is shown below:

= $\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}$

where,

Carrying cost is $80 × 40% = $32

Annual demand = 60 bags × 12 months = 720 bag

And, the ordering cost is $20 per order

Now put these values to the above formula

So, the value would equal to

= $\sqrt{\frac{2\times \text{720}\times \text{\$20}}{\text{\$32}}}$

= 30 bags

Now the demand is decreased by 10% So, the annual demand would be

= (60 - 6) × 12 months

= 54 bags × 12 months

= 648 bags

The other things will remain the same

Now put these values to the above formula

So, the value would equal to

= $\sqrt{\frac{2\times \text{648}\times \text{\$20}}{\text{\$32}}}$

= 28.46 bags

4 0

3 years ago

Suppose that jack, sophia, and hal enter into a contract to close on the business without the non-competition agreement. jack st

Anarel [89]

If jack does not accept the $100,000 there is a valid contract for the sales business, with out a non competition clause.

4 0

3 years ago

Rohit, an Indian, is a marketing executive in an American company. He graduated from a top Ivy League university in the United S

Bogdan [553]

Answer: The company prefers to have white Americans at top positions, is most likely the reason why Rohit was not promoted.

In this particular case, Rohit a marketing executive who has graduated from a top Ivy League university in the United States and has been known for his outstanding performance, positive attitude, and innovative ideas yet somehow Ryan, a white male with lesser experience and average performance, is promoted to the position of marketing manager.

This states that there is discrimination in this organization and they tend to hire white people over people of color.

Therefore, the correct option is (b). 

3 0

3 years ago