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4vir4ik [10]
2 years ago
9

Assume that a pure monopolist and a purely competitive firm have the same unit costs. In this case, determine what is true with

respect to (a) price, (b) output, and (c) profits.
1. PMonopoly > PCompetition
2. PMonopoly < PCompetition
3. PMonopoly = PCompetition
4. QMonopoly > QCompetition
5. QMonopoly < QCompetition
6. QMonopoly = QCompetition
7. ProfitMonopoly > ProfitCompetition
8. ProfitMonopoly < ProfitCompetition
9. ProfitMonopoly = ProfitCompetition

a. Which of the combinations above are accurate?

b. Assume that a pure monopolist and a purely competitive firm have the same unit costs. In the case of a pure monopolist, resources will be allocated

c. Even though both monopolists and competitive firms follow the MC = MR rule in maximizing profits, there are differences in the economic outcomes because

d. The costs of a purely competitive firm and a monopoly may be different because

e. If a monopoly can experience economies of scale, it can
Business
1 answer:
grandymaker [24]2 years ago
5 0

Answer:

a. 1, 5 and 7

b. Resources will be allocated inefficiently

c. Differing sizes and capacities

d. Benefits due to economies of scale

e. Reduce prices and improve resource allocation.

Explanation:

The correct combination is 1, 5 and 7. The price of a pure monopoly firm is much higher than that of purely competitive firm because the later is a price taker while the former is a price fixer. Because of this, output of monopoly is lower while the profit margin is higher than that of competitive firm.

Assuming that a pure monopolist and a purely competitive firm have the same unit costs. In the case of a pure monopolist, resources will be allocated inefficiently because the monopolist does not produce at the point of minimum Average Total Cost and does not equate price and Marginal cost.

Even though both monopolists and competitive firms follow the MC = MR rule in maximizing profits, there are differences in the economic outcomes because pure competitors lack capacity and are smaller in size while the monopolist has the capacity to expand inorder to maximize profits.

The costs of a purely competitive firm and a monopoly may be different because the monopolist is capable of taking advantage of cost reduction arising from economics of scale. Pure competitors does not experience economies of scale due to their small sizes.

If a monopoly can experience economies of scale, it can reduce prices beyond that of the pure competitor thereby ensuring a more efficient resource allocation.

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Christie and Jergens formed a partnership with capital contributions of $360,000 and $460,000, respectively. Their partnership a
Orlov [11]

Answer:

Christie's share is $104500 while Jergens share is $48500. Thus, the first option is the correct answer.

Explanation:

The appropriation of net income among the partners will be as follows,

                                              $                   $

Net Income                                          $153000

<u>Less: Salary to Partner</u>

Christie                                                  (66000)

<u>Less:Interest on Capital</u>

Christie                               36000

Jergens                              <u>46000        (82000)</u>

Remaining Profit                                     5000

<u>Distribution of Remaining Profit</u>

Christie  (5000/2 = 2500)                       2500

Jergens  (5000/2 =2500)                       <u>2500</u>

<u />

<u />

Christie's Share = 66000 + 36000 + 2500    = $104500

Jergen's share = 46000 + 2500   = $48500

5 0
2 years ago
Gomez runs a small pottery firm. He hires one helper at $13,000 per year, pays annual rent of $5,500 for his shop, and spends $2
alisha [4.7K]

Answer:

(a) $35,000

(b) $8,000

Explanation:

(a) Accounting profit:

= Total revenue - Explicit cost

= $75,000 - (wages + Annual rent + Material cost)

= $75,000 - ($13,000 + $5,500 + $21,500)

= $75,000 - $40,000

= $35,000

(b) Economic Profit:

= Total revenue - Explicit costs - Implicit costs

= $75,000 - (wages + Annual rent + Material cost) - (Income from investment + Earnings as a potter + Worth of entrepreneurial talents)

= $75,000 - ($13,000 + $5,500 + $21,500) - ($5,500 + $19,000 + $2,500)

= $75,000 - $40,000 - $27,000

= $8,000

8 0
2 years ago
16. John Smith has been a bachelor for most of his life and has been very happy that way. He has spent the last seven years livi
matrenka [14]
#16 is B because I know I’ve had that problem before
6 0
2 years ago
Hart Manufacturing makes three products. Each product requires manufacturing operations in three departments: A, B, and C. The l
Serjik [45]

Answer:

Objective function:

Maximize Z: 30P1 + 25P2 + 28P3

Subject to:   2.00P1 + 1.50P2 + 3.00P3 ≤ 450 (Department A constraint)

                    2.50P1  + 2.00P2 + P3       ≤ 350 (Department B constraint)

                    0.25P1  + 0.25P2 + 0.25P3 ≤ 50  (Department C constraint)

                           P1, P2, P3                       ≥  0 (Non-negativity)

Explanation:

The objective function is formulated from the contribution margin of the three products. For instance, the contribution of Product 1 is $30, the contribution of Product 2 is $25 and the contribution of Product 3 is $28. Thus, the objective function will be 30P1 + 25P2 + 28P3.

The constraints were obtained from the departmental labour hours requirements for each product. For instance, Product 1 requires 2 hours in department A, Product 2 requires 1.50 hours in department A and Product 3 requires 3 hours in Department A. Thus, the constraint will be 2.00P1 + 1.50P2 + 3.00P3.

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Answer:

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b. Standard unfit review report  

As the lawful insight has guaranteed that the body of evidence against S Software has no merit, it would have no impact on the fiscal summaries of the organization. In this manner, no disclosure is required comparable to the case  

c. Unfit report remembering an illustrative section for change for bookkeeping head  

The change in bookkeeping treatment a the auxiliary is because of limitations on repatriation of income put on all outside claimed organizations in Panama Therefore, it is adequate and no compelling reason to qualify the report However, a logical section ought to be added to the report clarifying the adjustment in bookkeeping head  

d. Inadequate report including

lanatory paragaph for change in bookkeeping head  

e. Standard inadequate review report  

As the adjustment in the administration lives for deterioration purposes on automobiles is legitimized, a standard inadequate review report ought to be given  

f. Standard unfit review report  

Right now, blunder was accidental and the administration fittingly remedied the mistake before the finish of field work Therefore, a standard inadequate review report ought to be given  

g. Qualified review report including a disclaimer of feeling.  

Right now, examiner possesses 10 percent of the organization's stock Therefore, the reviewer will be not viewed as free as there is an irreconcilable circumstance Thus, a certified review report including a disclaimer of conclusion ought to be given  

h. Adverse review report  

It is obvious from the survey of credit portfolio that there would be a significant increase in the advance misfortune save Al, writedown of the advances will place the customer into infringement of the state's capital requirements Therefore, plainly a going-concern issue to However, the customer is refining to make changes in accordance with disclose the conceivable going concern issue in the notes to the fiscal reports In such case, the evaluator should give an unfriendly review.

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