Answer:
a. Profit; $520
b. Firms will enter; Left
c. Zero profits or normal profits
Explanation:
A restaurant is operating in a monopolistic competitive market.
The restaurant is producing 260 meals per day.
This is the profit maximizing level of output where the marginal cost is equal to marginal revenue.
The average total cost at this point is $10.
The price level is $12.
The profit or loss to the restaurant will be equal to the difference between total revenue and total cost.
a. Profit
= Total Revenue - Total cost
= $12
260 - $10 260
= $3,120 - $2,600
= $520
b. This supernormal profit will attract other firms to enter the market, as a result the market share of existing firms will decline. The demand curve of the restaurant will move to the left.
c. In the long run, the firms in a perfectly competitive market earn only zero economic profits as positive profits attract new firms and negative profits cause the firms to leave.
So the restaurant will have zero or normal profits in the long run.
Answer:
learning effects
Explanation:
Learning effects: In economics, the term "learning effects" is described as the process through which specific education is considered as increasing productivity and therefore results in producing higher wages. It gives an insight to the company to develop some competitive advantage by decreasing some of the production costs. However, the employees are focused on working more efficiently, decrease in the number of wastes and defects on several products.
In the question above, the given statement signifies the leaning effects.
Answer:
$1,700
Explanation:
Given that,
Purchase of raw materials inventory = $1,000
Assignment of raw materials inventory to Job 5 = $500
Payroll for 20 hours with $1,000 assigned to Job 5
Factory utility bills = $750
Overhead applied at the rate = $10 per hour
Cost assigned to Job 5 at the end of the week:
= Raw materials inventory to Job 5 + Labor cost + Manufacturing Overhead applied
= $500 + $1,000 + ($10 per hour × 20 hours)
= $500 + $1,000 + $200
= $1,700
Answer:
Cost of equity, re= 0.098356 or 9.84 %
Explanation:
D1 = $ 1.25
P0 = $ 27.50
gL = 5 % = 0.05
F = 6 % = 0.06
Cost of equity, re can be calculated using the formular below:
Cost of equity, re = D1/ {P0 x (1- F)} + gL
= $ 1.25 / {$ 27.50 x (1- 0.06)} + 0.05
= $ 1.25 / ($ 27.50 x 0.94) + 0.05
= $ 1.25 / 25.85 + 0.05
= 0.048356 + 0.05
Cost of equity, re= 0.098356 or 9.84 %
Answer:
"B"
Explanation:
Market intelligence are sets of tool that can provide information about customers , competitors and other market related factors in order to increase market shares , reduce cost and improve profit
A lot of information are required and can be time consuming and costly .
To this effect an organization always look out for the best possible ways of achieving this in a cost effective way.
We have experts who are specialists in this and an organization can also make use of available data that are related to their marketing objectives.
