Answer: Firms will exit the market, causing price to rise until losses are eliminated
Explanation:
When there is a decrease in demand in a Perfectly Competitive Market, firms will have to start producing at a lower Quantity to manage their Marginal cost. This leads to Economic losses on their part in the short run.
In the long run however, should the situation remain the same, the new price would be less than their Average Cost which would deepen Economic losses. Firms would respond by exiting the market in the long run.
As the firms exit, the supply curve shifts left as supply drops. This drop in supply leads to a price rise. The exits will continue until enough firms leave that the market's remaining firms will stop suffering economic losses.
Answer:
The correct answer is inertia.
Explanation:
Inertia is called in physics the resistance that bodies oppose to modify their state of motion or stillness, either to alter their speed, their course or to stop; although the term also applies to the modifications of your physical state.
A body, thus, requires a force that overcomes inertia to alter its trajectory, which would otherwise adhere to the laws of uniform rectilinear motion, or to initiate a movement, otherwise it would remain at rest. This, of course, considering that there is no rest or rectilinear and uniform movement in the universe, except based on a reference (observation) system. That is why it is preferred to speak of "relative rest."
Answer:
It can purchase at most, $18.13 per share.
Or 72.52 millions for the total 4,000,000 shares
Explanation:
We are given with the present value of the merger at Craftworks discount rate. The shares can be purchase at most at the same level of the present value of the increase in the free cash flow.
That way, the net present value will be zero and the merger will yield the 16% required.
72,520,000 Millions
4,000,000 shares outstanding
price per share 18.13
The crafworks shares can be purchase at most for 18.13 above this, it would yield the 16% required
Currently the share are at 16.25 so it could be possible to do the take-over
Answer:
See explanation section
Explanation:
To record the journal entry to write off the uncollectible account according to the direct write-off method, we have to use bad dad expanse instead of an allowance account.
December 31 Bad Debt Expense Debit $1,200
Account receivable - Acme, Inc. Credit $1,200
Note: As the company did not get the money from the Acme, Inc., They treated the expense as irrecoverable.
