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Luda [366]
4 years ago
15

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 200 units is $4

.00. The average variable cost is $3.50. The market price of the product is $3.00. To maximize profits or minimize losses, the firm should
Business
1 answer:
DaniilM [7]4 years ago
5 0

Answer:

To maximize profit , the firm should shut down

Explanation:

In this question we are tasked with stating what a firm should do to maximize profits or minimize loss.

In this particular situation, what the firm should do is to shut down. why?

The reason why the firm should shut down is that the price per unit is less than the average variable cost. In the question, we can identify that the price per unit is $3 while the average variable cost is $3.50. We can see that the price per unit is less than the average variable cost from their values.

And hence to minimize loss or maximize profit, what the firm has to do is to shut down its operations

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A pencil manufacturer is in a perfectly competitive market. The firm can sell as much as it wants at a price of $1.50 per pencil
Ierofanga [76]

Answer:

d. Continue production in the short run, but exit the business in the long run unless prices are expected to rise or costs to fall..

Explanation:

Currently, their sales revenue less variable cost is positive as it can sale at $1.50 dollars and the variables cost are less than that. Therefore, there are fixed cost thefirm can pay because it produce.

Now, in the long-run when the firm can exit the market it should consider to do so if it continues to get an average cost above the selling price.

3 0
3 years ago
Holland Auto Parts is considering a merger with Workman Car Parts. Workman's market-determined beta is 0.9, and the firm current
Minchanka [31]

Answer:

0.097 OR 9.7%

Explanation:

Cost of Equity using CAPM-

Re = Rf + Beta (Rpm)

where,

Rf = Risk free return = 6%,

Rpm = Risk premium = 4%,

Beta = 0.9

Therefore,

Re = .06 + .9 (.04)

    = 9.6%

Unlevered cost of equity:

ReU = Wd × rd + We × re

where,

ReU = Unlevered cost of equity,

Wd = Debt = 20%

rd = cost of debt = 8%

We = equity = 80%

re = cost of equity  = 9.6%

Therefore,

ReU = 0.20 × 8% + .80 × 9.6%

       = 9.28%

Levered cost of Equity:

New Debt = 60%,

New Equity = 40%,

New rd = 9%

ReL = ReU + (ReU - rd) (D ÷ E)

= 9.28% + (9.28% - 9%) (0.60 ÷ 0.40)

= 0.097 OR 9.7%

6 0
3 years ago
Josiah Warren's utopian societies included stores where goods were exchanged according to the amount of work a person completed.
emmasim [6.3K]

Answer:

A) True

The statement is true.

6 0
4 years ago
In general, what are the benefits of the Internet to (i) the business person, (ii) an organization, (iii) a nation and (iv) a gl
steposvetlana [31]

Answer:

Explanation:

The Internet is essential for a successful business. The Internet helps businesses to achieve their goals and succeed in this competitive market. Marketing is important for business, and in this case the internet is the first and most important marketing tool for business owners. The Internet gives entrepreneurs great advantages in building a business infrastructure based on customer data and information. In this modern era, successful work without the Internet is impossible. The Internet has changed the ways in which education, communication and data are imported and exported. Internet technology provides excellent data management resources to offer customers unique and creative solutions.

The benefits of turning the organization world to the Internet are immense. The Internet provides great opportunities for organizational suppliers and cost reduction at all stages of the manufacturing process. Supply costs can be reduced through increased markets and increased competition through online supply systems. Another option is to transfer sales and data to cheaper channels. The Internet can significantly accelerate the market by reducing the time needed to transfer, purchase and process daily business contacts such as purchase orders, invoices and shipping. notifications. The Internet has greatly expanded the area of ​​information management: documents and technical documentation can be changed in real time, legally recognized signatures can be used, browsers can be accessed from suppliers and customers' data systems, and processes can be completed faster.

The Internet is a very effective tool for the nation. It has the potential to increase productivity through various but mutually reinforcing ways, including:

- Significantly reduce the cost of many operations required for the production and distribution of goods and services;

- Increase managerial efficiency, especially for companies to manage supply chains more efficiently and to communicate more easily within the company and with customers and partners;

- Increasing competition, price transparency and expanding markets for buyers and sellers;

Increasing marketing and pricing efficiency;

- Increase consumer choice, comfort and satisfaction in a variety of ways.

Many people like to think that mankind is at the beginning of a new era of enlightened communication. The visions are packed with how we can live, work, work and change our interactions with digital technology. It is believed that the Information Age will bring about fundamental change and development and that all countries around the world are building the necessary infrastructure, the "data highways" to respond to the challenges of twenty information societies. It is assumed that the digital revolution promises a lot of progress for developing countries and is allowed to leapfrog the more developed countries by leaps and bounds. The idea of ​​joining the global information society is strongly defended not only by business interests, but also worldwide. Increasingly, the measures are aimed at bringing new information technologies to less developed regions of the world, political agendas at the international, regional and national levels and less international development efforts. to improve people's lives. However, it is important to think about what these needs are if they are properly implemented. Disadvantaged people face major health problems, lack of education, and difficulties in ending.

6 0
3 years ago
Food for Families, a nonprofit organization, uses inputs such as money, groceries, and volunteer time and labor to transform foo
docker41 [41]

Answer:

Option D                                        

Explanation:

In simple words, A transformation phase relates to any operation or collection of actions that selects, converts and contributes value to one or even more variables, and generates outcomes for consumers or stakeholders.   A medical facility, for instance, turns sick people (the input) into healthy individuals (the result).

It normally takes several separate transitions to create a product or a service. The ultimate transition can be defined as the mega process, and as mini processes, the far more specific transitions inside this macro operation.    

4 0
3 years ago
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