Answer:
When monopolistically competitive firms advertise, in the long run they will still earn zero economic profit.
Explanation:
Monopolistic competition happens when many producers sell products that are differentiated from one another and hence are not perfect substitutes
Based on this, the demand curve of a firm in a monopolistic competitive market will shift so that it is tangent to the firm's average total cost curve and this will make it impossible for the firm to make economic profit. The best that can be expected is to be able to break even
This means in the long run, a monopolistically competitive firm will make zero economic profit.
A good example is Hotel which can only raise its prices without losing all of its customers based on brand loyalty and distinct quality differentiation.
Answer:
Explanation:
The journal entries are shown below:
a) April 1, 2012;
Dr Cash A/C. $290,000
Dr finance charge $10,000
Cr payable $300,000
($500,000 × 2% = $10,000)
b)
Dr Cash A/c $350,000
Cr Account receivable $350,000
c)
Dr payable $300,000
Dr interest expense $7,500
Cr Cash $307,500
(10% × $300,000 × 3/12 = $7,500)
Answer:
$9,215
Explanation:
Given that,
Bank balance = $8,300
Outstanding checks = $650;
Deposits in transit = $1,300;
Bank service charges = $53
Bank error = $265
Book cash balance:
= Bank balance - Outstanding checks + Deposits in transit + Bank error
= $8,300 - $650 + $1,300 + $265
= $9,215
Therefore, the correct cash balance at the end of the month is $9,215.
