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2 years ago

At a price of $13, quantity demanded is , quantity supplied is ; therefore excess has occurred.

1 answer:

5 0

At a price of $13, quantity demanded is 120 units<span>, quantity supplied </span>is 130 units; therefore,<span> excess supply</span> has occurred. This is also called as economic surplus. This is the effect when the price set to the product is above its equilibrium level which is determined by its supply and demand.<span> </span>

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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

A clothing manufacturer makes both shirts and shorts. The sales price for shirts is $24 with variable costs of $10 and shorts ha

Gnoma [55]

Answer:

1)They would prefer to make shorts as contribution margin per unit is higher for shorts

Explanation:

Step 1. Given information.

Sales price shirts is $24

Variable costs shirts is $10

Sales price shorts $32

Variable costs shorts $17

Step 2. Formulas needed to solve the exercise

Contribution margin = sales price - variable cost

Step 3. Calculation.

Contribution margin shirts = 24 - 10 = 14

Contribution margin shorts = 32 - 17 = 15

Step 4. Solution.

<h2>Contribution margin shorts > Contribution margin shirts</h2>

6 0

2 years ago

Assume that more corn is used to produce ethanol. Simultaneously, more effective control of pests and weeds occurs during farmin

Sophie [7]

The price of corn will increase will definitely occur in the corn market.

Option A

<u>Explanation: </u>

Ethanol is a renewable fuel of several organic materials known as "biomass." Further, then 98% of U.S. petroleum includes ethanol, usually E10 to control air emissions, or E10 (10% ethanol, 90% gasoline). Oxygenation of petrol

Corn ethanol is the primary ethanol origin of ethanol fuel throughout the United States derived from corn biomass.

Maize ethanol is generated by fermenting and distilling of ethanol. It is questionable whether corn ethanol consumption leads to lower pollution of greenhouse gas than petrol.

4 0

2 years ago

Plessings Company leased a piece of machinery to Banana, Inc. on January 1, 2019. The lease is correctly classified as a sales−t

Stells [14]

Answer:

7.49%

Explanation:

n = Number of payment periods = 3

P = Total lease payment = Annual lease payment * Number of period = $20,700 * 3 = $62,100

FV = fair value of the machine = $50,000

Implicit rate = [($62,100 / $50,000)^(1 / 3)] - 1 = 0.0749, or 7.49%

3 0

2 years ago

On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note requir

hammer [34]

Answer:

Dr interest expense $7,000

Dr notes payable $7,238

Cr cash $14,238

Explanation:

The first task is to compute interest expense on the loan in year 1 which is shown below:

interest expense=$100,000*7%

interest expense=$7,000

Principal repayment=repayment-interest repayment

Principal repayment=$14,238-$7,000=$7,238

The double entries are to debit interest expense and notes payable with $7,000 and $7,238 respectively while cash is credited with $14,238 as an outflow of cash.

3 0

2 years ago

At a price of $13, quantity demanded is ________, quantity supplied is ________ ; therefore excess ________ has occurred.

At a price of $13, quantity demanded is , quantity supplied is ; therefore excess has occurred.