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xenn [34]
3 years ago
15

If a specific subsidy​ (negative tax) of s is given to only one competitive​ firm, how should that firm change its output level

to maximize its profit​, and how does its maximum profit​ change? Let the market price be​ p, the marginal cost of production​ (prior to the​ subsidy) for the firm be​ MC, and the subsidy be s. To maximize profit with the​ subsidy, the firm should A. decrease its production until pequalsMC. B. increase its production until pequalsMCminuss. C. increase its production until pequalss. D. increase its production until pequalsMCpluss. E. not change its level of production.
Business
1 answer:
elena-s [515]3 years ago
6 0

Answer:

The correct answer is option D.

Explanation:

The market price is P.

The marginal cost is given at MC.

The subsidy is equal to s.  

When the subsidy is provided to only a single firm, that firms marginal cost will decline. The firm can take advantage of decreased marginal cost by increasing the output level. The firm will produce the output where the price and marginal revenue is equal to marginal cost plus subsidy. At this point, the firm will be having maximum profit.

So, the firm will increase production until

P=MC+S

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Answer:

Sheridan Company

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= $367,100

Explanation:

a) Data and Calculations:

December 31 Inventory based on physical inventory =      $320,800

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Correct amount of inventory that Sheridan should report $367,100

b) Goods on consignment are generally the property of the consignor (supplier) and not the consignee's (retailer's).  Therefore, they must appear in the balance sheet of the consignor.  Goods on FOB destination remain the property of the supplier until they reach the buyer's destination.  This is why it is not included above.

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2 years ago
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Question a)

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Question c)

The subtraction of the <u>cost of good sold</u> from <u>net sales</u> is equal to the <u>gross margin</u>

Question d)

The subtraction of <u>Operating expenses</u> from <u>gross margin</u> results in the <u>Net Operating profits, before the taxes.</u>

Question e)

The subtraction of <u>Taxes</u> from <u>Net Profit before tax</u> results in <u>Net profit after taxes</u>

Question f)

The division of <u>Net profit after tax </u>over the <u>Net saves</u> gives you the <u>Net profit margin percentage.</u>

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5 0
3 years ago
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Answer:

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4 0
2 years ago
If a quota license is awarded to a domestic firm without an auction, it may generate bribes or lobbying spending to earn this re
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Answer:

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