Answer:
keep producing in the short run but exit the industry or go out of business in the long run
Explanation:
A perfect competition is characterised by many buyers and sellers of homogeneous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
A firm should shut down in the short run if price is less than average variable cost. But since the diner's price is greater than average variable cost, it should continue production.
A firm should exit the industry in the long run if price is less than average total cost. the diner's price is less than average total cost, so it should shut down in the long run
Answer:
a) Demonstrating bad timing.
Explanation:
If the firm releases a new technology with the hope of getting a lot of sales, only to have a competitor implement a similar, but more advanced or complete technology shortly after, it is because the firm is not aware enough of the timing of technological advancements.
A firm without bad timing should not have been surpassed in the technology department by a competitor so fast.
This kind of problem has hapenned in real life. for example, when Blackberry launched the 8000 - 9000 series of phones in 2006, only to have Apple launch the much more innovative and groundbreaking Iphone in 2007.
Answer:
LEASE LIABILITY: 1,121,136
Explanation:
the lease liaibility will be the present value of an annuity-due (payment at beginning of the period)
C 134,000
time 15
rate 0.1
PV $1,121,136
The lease laibility will be for 1,121,136
interst expense will be recognize over time against the lease liability and the payment decrease the liability. at the end of the agreement the lease liaiblity will be zero as there are no pending payment.
