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:
No journal is needed
Par value is now $1
Explanation:
There is journal entry for stock split no new funds were received from stockholders and the fact that the equity stockholders capital remain the same after the stock split.
It is a mere book redenomination where the number of outstanding shares in issue is increased while the par value is reduced proportionally.
In essence a stock split of 2 for 1 means one share is added to existing one and the two shares are now priced at the value of one previously
The par value after stock split=1/2*$2=$1
Answer:
Divisional product structure
Explanation:
Divisional product structure is also referred to as a product based structure. Employee are shared into divisions based on products they manufacture and sell within a particular geographic location.
The advantage of this structure is that employees work efficiently on the production and sale of one particular product.
This is ideal for ABC production that are expanding from a single product line into several diverse product groups, with most sales within one country.
Answer:
Production = 27600 units
Explanation:
The number of units that must be produced during the month should be enough to meet the selling requirement for the month plus the desired level of ending inventory. Any starting of beginning inventory at the start of the month will reduce the number of units to be produced. Thus, the formula to calculate production for the month is,
Sales = Opening inventory + Production - Closing Inventory
Total sales = 7000 + 8000 + 9000 = 24000
24000 = 18000 + Production - 21600
24000 + 21600 - 18000 = Production
Production = 27600 units
Answer:
To demonstrate the usage of company products and train employees.
Explanation:
The main purpose of the presentations that Keith is providing to the employees of the software company is to impart complete knowledge of the products to the employees. It is of utmost importance that each employee has complete understanding of the products and services provided by the company and know how to use them.
If any employee fails to understand the usage of the product, he will automatically fail to bring progress to the company as a whole.
