Mr. Holmes operates a firm which is having a problem competing with other firms. You have been hired to analyze the problem and make recommendations to help increase profits. After analysis you have determined that he is a perfectly competitive firm operating at too small a scale, but at a breakeven point in the short run. Be sure to label your graphs.
a) Draw two graphs, one for the market and the other for the firm, labeling the equilibrium price and quantity at which Mr. Holmes is currently producing..
b) On the same graph, in a) above show and explain what Mr. Holmes should do to help him achieve long run equilibrium.
c) Why is Mr. Holmes cost decreasing as he approaches long run equilibrium.

Answers

Answer 1

In graph a) the market is in equilibrium with price Pc and quantity Qc, and the firm is in equilibrium with price Pf and quantity Qf. This suggests that the company is too small and is producing at breakeven in the short term.

In graph b), Mr. Holmes needs to increase the output to his Qe, which is the long-term equilibrium point. This allows you to increase your profits by using economies of scale to increase demand for your products. Higher production yields greater economies of scale, allowing you to produce more at a lower cost per unit.

Over the long run, Mr. Holmes' costs will decrease. because economies of scale reduce production costs as he increases his production. As he produces more, fixed costs are spread over more output and his average unit price goes down. This allows him to lower prices and become more competitive in the market. Because we produce at a higher level, we can also benefit from external economies of scale, such as lower input prices and access to new technologies, further reducing costs.

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Related Questions

If the economy is falling below potential real GDP, which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? An increase in
government purchases

Answers

Which of the following would be a suitable fiscal strategy to restore the economy to long-run aggregate supply if the economy is slipping below potential real GDP An increase in government purchases

Federal, state, and municipal governments spend money on products and services through government purchases. One of the most important factors in calculating a country's gross domestic product is the sum of all of this spending, minus transfer payments and interest on the debt (GDP). Spending that doesn't include purchases includes things like agriculture subsidies and Social Security payments.

Government investment is defined as the purchase of goods and services by the government with the intention of generating future benefits, such as infrastructure investment or research spending (government gross capital formation). Together, these two categories of government spending—on final consumption and gross capital formation make up one of the primary parts of the GDP.

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Gwen and Travis organized a new business as an LLC in which they own equal interests. The new business generated a $10,000 operating loss its first year. Travis has no other taxable income for the current year, but expects to have sufficient taxable income in future years to pay tax in the 24% tax bracket. Which of the following statements regarding Travis' tax savings from the current LLC loss is true? Multiple Choice Travis can carry his share of LLC loss back two years as a net operating loss, and request an immediate tax refund of $1,200. Travis can carry his share of LLC loss forward, and will get tax savings only when he generates future income. Travis can only use his share of the LLC loss in the current year, and will receive no tax savings. The LLC will reallocate Travis share of the loss to Gwen, who can claim $1,750 of additional tax savings.

Answers

The statement "Travis can carry his share of LLC loss forward, and will get tax savings only when he generates future income" is true regarding Travis' tax savings from the current LLC loss .

In the United States of America, a limited liability company (LLC) is a type of company having a corporate structure which the owners from the personal liabilities of the obligations of the firm. Limited liability companies are hybrid legal entities which has traits of corporations, partnerships, and sole proprietorships.

Even though  a limited liability is an aspect which is similar to that of a corporation, The provision of flow-through taxes to the members of an Limited Liability Company is a feature of a partnership rather than that of an LLC. State legislation allows limited liability Companies. Every state has its own set of rules for controlling them. Members of a Limited Liability Company are its owners.

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Carrie, a student at Metropolitan Community College, dreams of starting her own business. In an effort to learn as much as she can about small business management, she talked to four friends who each offered their advice. Which of these suggestions is likely to help Carrie the most?Take courses related to small business management and look for a job with a successful businessperson, preferably in your field of interest.

Answers

Take classes in small business management, and seek employment with an accomplished entrepreneur, preferably in your area of interest.

What function does training provide for entrepreneurs?

People who obtain entrepreneurial education and training develop the self-assurance, knowledge, and skills needed to take advantage of economic opportunities. It teaches students how to spot possibilities, turn creative ideas into profitable ventures, effectively use resources, and launch their own businesses.

What have you learned to be the most important business lessons?

One thing to bear in mind regarding business is that failure doesn't mean the end of the world, but rather the chance of a new beginning. You can't walk this path while anticipating without making a few blunders. If you approach the journey knowing that failure will happen along the way, you'll do better.

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you are given the following term structure of spot interest rates: term (in years) spot interest rate 1 5.00% 2 5.75% 3 6.25% 4 6.50% a three-year annuity-immediate will be issued a year from now with annual payments of 5000. using the forward rates, calculate the present value of this annuity a year from now.

Answers

The present value of this annuity will be 13,152.50485 if you provided the following term structure spot interest rates in a year interest rate available. 1 5.00% 2 5.75% The cost of a three-year annuity is 3, 6,25%, 4,65%.

(1+fn) = (1+sn) n / (1+sn-1) n-1\s(1+f2) = (1+s2) 2 / (1+s1) = 1.05752/1.05 = 1.065053571 ...(1)\s(1+f3) = (1+s3) 3 / (1+s2) 2 = 1.06253/1.05752 = 1.072571034 ...(2)\s(1+f4) = (1+s4) 4 / (1+s3) To maintain such large values, use the store function in Financial Calculator: 3 = 1.0654/1.06253 = 1.07253535.

The annualized PV for the annuity is 5000/(1+f2), 5000/[(1+f2)*(1+f3)], and 5000/[(1+f2)*(1+f3)*(1+f4)].

. ...(4)\s= 5000/(1.065053571) + 5000/[(1.065053571)*(1.072571034 )] + 5000/[(1.065053571)*(1.072571034 )*(1.07253535)]

=13,152.50485

The interest that a lender charges a borrower is calculated as a percentage of the principal, or the amount loaned. The yearly percentage rate used to represent a loan's interest rate (APR).

An interest rate may also apply to earnings from savings or certificate of deposit accounts at a bank or credit union. An annual percentage return is used to determine the interest on these bank accounts (APY).

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greenwich university is buying a distance learning system. previously, the school had no distance learning technology. for greenwich university, this represents a(n) situation.

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A distant learning system is being purchased by Greenwich University. The school did not have any technology for distant learning before. This is a brand-new buying situation for Greenwich University.

In essence, every transaction made by a corporation falls into one of three categories: fresh purchases, straight repurchases, and modified repurchases. The phrase "new buy" describes the kind of purchase that a firm makes for the first time, i.e., when the business needs to weigh its alternatives since it is buying a new product.

In other words, a new buy also refers to a product type that has never been purchased by the organisation in general, the employees participating in the purchase, or the buying centre.

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in guadeloupe and martinique, the use of pesticide chlordecone on banana plantations led to devastation of fishing communities downstream. which of the following statements is correct? clean water is a right for the fishing community. the use of pesticide is a right for the banana producers. the problem arises when actors take into account the costs their decisions impose on others. this is an example of a social dilemma.

Answers

In Guadeloupe and Martinique, the use of pesticide chlordecone on banana plantations led to devastation of fishing communities downstream. The statement which is correct is that, this was an example of a social dilemma.

Martinique is considered to be an island that is largely made up of mountains and is generally one large piece of land. Additionally, Guadeloupe has a little more variety. With reality, it is made up of two larger areas.

Here, the unregulated pursuit of self-interest is said to lead to outcomes that are Pareto inefficient, compared to the outcome when individuals take into account the effect of their decision.

Hence, it is an example of a social dilemma.

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Alaska Salmon Inc., a large salmon canning firm operating out of Valdez, Alaska, has a new automated production line project it is considering. The project has a cost of $150,000 and is expected to provide after-tax annual cash flows of $73,306 for eight years. The firm's management is uncomfortable with the internal rate of return (IRR) reinvestment assumption and prefers the modified IRR approach. You have calculated a cost of capital for the firm of 12 percent. What is the project's modified internal rate of return (MIRR)? Given that the cost of capital is 12 percent, should the project be accepted? Why?

Answers

MIRR stands for modified internal rate of return which is used to compare the potential projects with the return of projects. MIRR is a modified version of the internal rate of return (IRR) which is used to calculate the reinvestment rate or cash flows of even and uneven accounts.

In the question, given information:

Cash flow 0= -150,000

Cash flow 1= 73,306

Cash flow 2= 73,306

r = 12%

Now, MIRR= (future value of positive cash flows/ percent value of negative cash flows) (1/n)-1

I.e., n(FVCF / PVCF) -1

Therefore,

FVCF= future value of positive cash flows discounted at r.

= (73,306 / 1+12%) + (73,306 /1.128 )

= 65,452 + 29,607

= $95,059

PVCF= present value of negative cash flows= -150,000

n= number of years= 8

MIRR = (95,059 /-150,000) - 1

= 3.7%

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A company estimates that the average cost in dollars of producing x units of a certain product is given by C = 800 + 0.04x + 0.0002x^2/x =. What is the number of units that need to be produced to minimize the average cost? Select one: a. 2000 b. 4000 c. 16,000 d. 4,000,000

Answers

The number of units that need to be produced to minimize the average cost is 2000.

The average cost function has been given with x level of output which is

[tex]C(x)=\frac{800 + 0.04x + 0.0002x^2}{x}[/tex]

To get the the units to be produced to achieve minimum average cost, we need to differentiate the average cost function and equate it to zero.

Differentiation the average cost function with respect to x we get,

[tex]d(C(x))= \frac{x ( 0.04x + 0.0004x)- 800 + 0.04x + 0.0002x^2}{x^2}[/tex]  (Using quotient rule)

Further simplifying we get,

[tex]d(C(x))= \frac{0.04x+ 0.0004x^2- 800 -0.04x - 0.0002x^2}{x^2}\\d(C(x))=\frac{0.0002x^2-800}{x^2}\\[/tex]

Equating this to zero, we get the number of units required to get the minimum average cost.

0.0002x^2-800/x^2=0

0.0002x^2-800=0

0.0002x^2=800

x^2=800/0.0002

x^2=4000000

x=2000

Therefore, the company needs 2000 units to be produced to minimize the average cost.

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Cynthia is considering the purchase of a new printer for her real estate office. She is considering a printer that doesn't have as many functions but is available at a considerably lower price than her current printer. She is engaged in ____ analysis.
Select one:
a. value
b. profit
c. downsizing
d. vendor
e. strategicvalue

Answers

Cynthia is engaged in value analysis while buying a printer of less function considering its low price.

What is value analysis?

By analyzing the functionality of a product or process in relation to its cost, value analysis (VA) is a tool to improve cost efficiency. It assists in locating and removing wasteful expenses made during the production of a good or the performance of commercial operations.

Cost reduction enables a company to spend less on expenses throughout the year, increasing its profit. As a result, companies come up with creative ways to cut expenses without sacrificing the quality of their operations, goods, or services. Value analysis is a technique for cost reduction that involves examining the utility, service, or process in relation to the costs associated with it. The value analysis team goes through each segment or component of a product, service, or process in detail and looks for places where costs can be reduced. Then, it develops creative strategies to facilitate cost reduction. The recommendations are then put into practice to raise earnings by cutting expenses.

For instance, a value analysis of a wall clock will use several techniques to dissect its functions and the costs associated with implementing those functions at various stages. Finally, the group will examine how users will use the wall clock to view the time and beauty of home add to it.

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The Law of Diminishing Returns states that eventually both the Total Product and Marginal Product
will reach a peak, and then they will eventually decline as we continue to increase production.
True – Bubble A
False – Bubble B

Answers

An economic theory known as the rule of declining marginal returns states that once an optimal level of capacity is reached, adding more factors of production will really only lead to smaller improvements in output.

For instance, a factory hires workers to produce its goods, and eventually the business performs at its best. If you increase the number of employees beyond this point, operations will become less efficient even if all other production factors remain constant.

The idea of declining marginal utility is connected to the law of diminishing returns. Economies of scale can be used to contrast it. The "law of declining returns," "principle of diminishing marginal productivity," and "law of diminishing returns" are other names for the "law of diminishing marginal returns."

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The equilibrium price for a good with a vertical supply curve and a downward-sloping demand curve is $20. If a binding price floor is set, which of the following will occur?

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The equilibrium price of a good with a vertical supply curve and a falling demand curve is $20. Where a binding minimum price is set. The sum of consumer surplus and producer surplus reduces.

Why is the vertical supply curve inelastic?

If the supply curve is vertical, it means that the supplier supplies the same amount at all prices. Regardless of the price change, the delivery quantity will not change. Therefore, supply is completely inelastic and the price elasticity of supply is zero.

Which commodity has a vertical supply curve?

The supply curve can be vertical, means that the supply is fixed regardless of the market price. There are items that cannot be increased or decreased, such as old manuscripts, rare stamps, and old coins. These commodities produce a vertical supply curve. For example, the amount of land in the world can be considered fixed

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a call option on the illinois stock specifies exchange price of $38 today the stock prices at $40 the premium on the call option is $5 do not option

Answers

Net Profit or Loss Per Share to Be Earned by the Writer (Seller) of the Call Option

$5

$4

$2

$0

$-2

$-5

Net profit is the amount of money your business earns after deducting all operating, hobby, and tax charges over a given time period. to reach at this cost, you want to understand a business enterprise's gross earnings. If the price of internet earnings is terrible, then it's miles known as internet loss.

Gross profit suggests how lots cash your enterprise makes after the assembly a few charges. net income suggests how much you're making after assembly all costs. A commercial enterprise's gross income is the cash it has left after procuring the products and offerings it sold.

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a company uses the aging of receivables method. during the year, the company recorded credit sales of $560,000. before adjusting entries at year-end, the company has accounts receivable of $300,000, of which $53,000 is past due, and the allowance account had a credit balance of $2,800. the company expects it will not collect 10% of the amount not yet past due and 29% of the past due accounts. which of the following adjusting entries will the company record at year-end?

Answers

The company will record two adjusting entries at year-end. The first adjusting entry will be a debit to the Allowance for Doubtful Accounts for $14,280 (10% of $142,800). This is the amount that the company anticipates it will not collect from the amount not yet past due.

The second adjusting entry will be a debit to the Allowance for Doubtful Accounts for $15,170 (29% of $53,000). This is the amount that the company anticipates it will not collect from the past due accounts. The total of the two adjusting entries will be a debit to the Allowance for Doubtful Accounts for $29,450. This amount will then be subtracted from the total Accounts Receivable of $300,000, resulting in an adjusted Accounts Receivable balance of $270,550.

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the difference between the face value of a bond and its selling price when a bond is issued for less than the face value

Answers

The difference between the face value of a bond and its selling price when a bond is issued for less than the face value is called bond discount.

The fact that a bond's face value is fixed while its price fluctuates is the key distinction between the two. Up until the bond's maturity, whatever the face value is stays the same. Bond values, on the other hand, are subject to sudden changes.

The bond price might theoretically reach $0 if credit quality dramatically declined. When a business is liquidated, secured bondholders are really paid first, thus some money is typically recovered.

Bond price declines may also result from ongoing interest rate increases. Regarding the maturity timeline, there is finally some positive news. As a bond gets closer to maturity, its price typically approaches its face value, or par value.

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commissions charged on the trading of stock are: multiple choice only on buying of stock on buying and selling of stock none of the answer choices are correct. only on sale of stock fixed

Answers

When trading stocks, commissions are charged on buying stock and selling of stock. A commission is a fee charged by a broker to execute a trade, and it is typically a percentage of the trade size.

When buying stock, the commission is charged when the order is placed and will typically range from a few cents per share up to a few dollars per share. This commission is usually a flat fee and is not dependent on the size of the order.

When selling stock, the commission is charged when the order is completed, and it is typically a percentage of the total sale amount. The commission may be based on the total trade size or the total dollar amount of the trade. The commission rate may also be higher for larger trades.

In both cases, the commissions charged by brokers vary depending on the broker and the type of stock being traded. Some brokers may offer lower commissions for certain types of stocks, or may even waive the commission altogether. Be sure to check with your broker to determine what commission rates they offer.

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yosemite bike corp. manufactures mountain bikes and distributes them through retail outlets in california, oregon, and washington. yosemite bike has declared the following annual dividends over a six-year period ended december 31 of each year: 20y1, $24,000; 20y2, $10,000; 20y3, $121,000; 20y4, $95,000; 20y5, $120,000; and 20y6, $140,000. during the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $90 par, and 100,000 shares of common stock, $4 par.

Answers

Average annual equity dividend/share is  $0.40 per share.

Annual dividend that should be paid to preferred equity holders = 25,000*2%*90 = 45,000. As total dividend is less than this figure in 2009 and 2010, all of the dividend gets paid to preferred equity holders so that there is zero dividend for common equity holders.

By 2011, there is arrear of (45,000*2-24,000-10,000) = 56,000 towards the preferred holders. Along with the 45,000 for 2011, there is a total payment of 56,000+45,000 = 101,000 towards preferred equity holders. The remaining dividend of 126,000-101,000 = 25,000 is paid towards common holders.

In 2012 to 2014, the preferred holders get the standard 45,000 while the remaining dividends get paid to common equity holders.

The per share dividend is calculated by dividing the dividend paid by the number of outstanding shares - this is 25,000 for preferred shares and 100,000 for common shares.

2. Total preferred dividend paid = 270,000

So average annual preferred dividend/share = 270,000/6/25,000 = $1.80 per share.

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find an advertisement with strong nonverbal messages from an internet ad, or take a photo of one from a magazine or newspaper. include the ad in your post, and discuss what advertising message is being sent and what nonverbal elements contribute to that message. how did you personally react to the message? do you think that others might interpret the message differently? (adapted from adams

Answers

This particular advertising makes it clear that the marketer wants to spread the idea that staying healthy via training and activities.

The message being delivered by this specific advertisement is that by avoiding but good for the aid we may simply be fit. This commercial depicts a human body that yearns to be physically fit but is unable to do so since it consumes alcohol and harmful foods. This gives the appearance of being appropriate for the human body. indirectly encourages exercise and fitness in order to prevent problems brought on by obesity. With the aid of the illustration of a human body inside a human body, the Gestalt theories have been implemented by the designer. The external human body is a direct representation of the human body's propensity to ingest a greater variety of harmful foods.

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Diamond Threads Alterations received $200 in cash for altering a wedding dress. Which of the following accounts is credited?

Answers

Answer:

service revenue

Explanation:

Service revenue is the income a company generates from providing a service. The amount is displayed at the top of an income statement and is added to the revenue from product earnings to show a company's total revenue during a specific time period.

The put/call ratio is computed as ____ and higher values are considered ____ signals. a. the number of outstanding put options divided by outstanding call options; bullish or bearish b. the number of outstanding put options divided by outstanding call options; bearish c. the number of outstanding call options divided by outstanding put options, bullish d. the number of outstanding call options divided by outstanding put options; bearish e. the number of outstanding put options divided by outstanding call options, bullish

Answers

The put/call ratio is computed as the number of outstanding put options divided by outstanding call options and higher values are considered bullish or bearish signals.

Put-name ratio (PCR) is a trademark generally used to decide the temper of the alternatives marketplace. Being a contrarian indicator, the ratio appears at alternatives buildup, allows buyers apprehend whether or not a latest fall or upward thrust withinside the marketplace is immoderate and if the time has come to take a contrarian name.

A growing put-name ratio, or a ratio more than 0.7 or exceeding 1, approach that fairness buyers are shopping for greater places than calls. It indicates that bearish sentiment is constructing withinside the marketplace. Investors are both speculating that the marketplace will flow decrease or are hedging their portfolios in case there's a sell-off.

In case buyers buy greater places relative to calls, the sentiment of the marketplace is bearish, overall. If buyers and traders are buying greater calls than places, the implied temper of the markets is bullish going ahead.

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A measurement of cancer is taken in a population of 40,000 individuals. 3,500 individuals are found to be living with cancer for past 6 months and additional 1,200 individuals were recently diagnosed with cancer. What is the the prevalence of cancer in this population?
11.75%
8.75%
3%
1.175%

Answers

The prevalence of cancer in a population of 40,000 individuals, which 3,500 individuals are found to be living with cancer for past 6 months and additional 1,200 individuals were recently diagnosed with cancer is 11.75% (the answer is A).



What is population?

It typically refers to the number of people in a single area, whether it be a city or town, region, country, continent, or the world.

Now, let's calculate the prevalence of cancer in this population.

Given from question

Total population = 40,000

3,500 people are found to be living with cancer for the past 6 months

1,200 additional people recently diagnosed with cancer as well.

Prevalence of cancer = people found in cancer for the past 6 months + new additional people / total population

= 3,500 + 1,200 / 40,000

= 4,700 / 40,000

= 0.1175

= 11.75%

Therefore, the prevalence of cancer in this population is 11,75% and the answer is A.  


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which of the following statements about the correlation coefficient is false? group of answer choices the value ranges between -1 and 1. a value of 1 implies that the returns for the two stocks move together in a completely linear manner. a value of -1 implies that the returns move in a completely opposite direction. a value of 0 implies that the returns are independent. none of the above (that is, all statements are true)

Answers

The statements about the correlation coefficient which is false is A value of zero means that the returns are independent.

A correlation coefficient  is a numerical live of some form of correlation, that means a applied math relationship between 2 variables. The variables could also be 2 columns of a given information set of observations, usually known as a sample, or 2 parts of a variable chance variable with a proverbial distribution.

A correlation coefficient is bigger than zero indicates a positive relationship whereas a worth but zero signifies a negative relationship. A value of zero  indicates no relationship between the 2 variables being compared. It whereas means that the returns are  dependent.

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FILL IN THE BLANK. One of the key relationships within economics is the inverse nature of gross domestic product (GDP) growth and the unemployment rate. As GDP __________, the unemployment rate __________.

Answers

One of the most important relationships in economics is indeed the inverse relationship between GDP growth as well as the unemployment rate. The unemployment rate falls as GDP rises.

What is a country's GDP?

A GDP is the aggregate of all the wealth created in a banking system. The service provided is the difference between of price of goods formed and the amount of products and services required to manufacture them, also known as value added.

What are the three kinds of GDP?

The total value among all services and goods produced at market prices is referred to as nominal GDP.The sum of all production of goods and services at constant prices is known as real GDP.Actual GDP is the unit of measure of all outputs in real time at any interval.

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The ending raw materials and finished goods inventories at December 31,2021 , follow the same percentage relationships to production and sales that occur 2022. Three pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost
$4
per pound. Prepare a production budget by quarters for the 6-month period ended June 30,2022 .

Answers

Based on production budget, the total production units that Hardon company should produce by June 30, 2021 are 34,500 units and total raw material cost is $147,360.

Production Budget

To construct a production budget, we need to use budgeted sales unit data as our base. After knowing the relationship between the sales units and ending finished goods inventory, we could find the units to be produced.

Remember that:

Ending finished goods inventory = 25% x Next quarter's sales units

Beginning FG inventory = Previous quarter's ending finished goods inventory

Hence, the production budget for Hardon company is:

                   Dec, 2021     Q1        Q2      Q3

Sales units                     5,000  6,000  7,000

End FG             1,250     1,500   1,750  

Beg FG                -          1,250   1,500   1,750

Production                     5,250   6,250  7,200

Direct Materials Budget

After finding the production budget for 3 quarters, we could build our direct materials budget using the information of raw materials required to produce one unit of the product.

Remember that:

RM needed = 3 x production units

                          Q1       Q2      Q3

Production      5,250  6,250  7,200

RM needed    15,750  18,750  21,600

End RM           7,500  8,640  

Beg RM           6,300  7,500  8,640

Purchase RM  16,950  19,890

RM costs         $67,800  $79,560

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Complete Question:

On January 1m 2022, the Hardon Company budget committee has reached agreement on the following data for the 6 months ending June 30,2022.

Sales units: First quarter 5,000 second quarter 6,000, third quarter 7,000

Ending raw materials inventory: 40% of the next quarter's production requirements

Ending finished goods inventory: 25% of the next quarter's expected sales units.

Third-quarter production: 7,200 units

The ending raw materials and finished goods inventories at December 31,2021 , follow the same percentage relationships to production and sales that occur 2022. Three pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound. Prepare a production budget by quarters for the 6-month period ended June 30,2022 .

The view that changes in the money supply are the primary cause of change in real output and the price level is most closely associated with:A) rational expectations theoryB) real business cycle theoryC) mainstream economicsD) monetarism

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The reasonable expectancies hypothesis contends that the past has an impact on the future. The theory also contends that individuals often make the right choices because they do so in light of both the facts at hand and their prior experiences.

According to monetarist theory, velocity is typically steady, which suggests that the money supply mostly determines nominal income. Nominal income fluctuations are a result of variations in both inflation and real economic activity (the amount of goods and services sold) (the average price paid for them). According to monetarists, inflation is entirely a monetary phenomena that can only be caused by increasing the money supply faster than the rate of increase in capacity production. The rational expectations theory is predicated on the idea that both the resource market and the market for goods are fiercely competitive. Being motivated by or founded on reasoning is the trait of being rational.

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the buyer of call option______ the premium initially for the possibility of ____ an asset later for a price below its market price

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The buyer of a call option pays the premium initially for the possibility of buying an asset later for a price below its market price.

The term "premium" refers to the option's current market value. It is the cost incurred for the call option's rights. The call buyer forfeits the premium they paid if the underlying asset is worth less at expiration than the strike price. They are not required to pay more for the stock than what the current market price is worth per share. However, if it is higher than the strike price, the buyer can purchase the shares for less than market price and still make a healthy profit.

As a result, unlike other derivatives like futures and forward contracts, which provide investors the right to make a profit on the transaction, options contracts only give them that right.

Thus, the option buyer is not required to purchase the stock at the strike price. They only have the option to do so, at which point they may choose to do so.

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it is actually possible to postpone the point of differentiation outside of the factory and further down the supply chain.

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It's possible to postpone the point of differentiation outside of the factory and further down the Supply chain. This is true.

A supply chain is the network of all the individualities, associations, coffers, conditioning, and technology involved in the creation and trade of a product.

A force chain encompasses everything from the delivery of source accouterments from the supplier to the manufacturer through to its eventual delivery to the end stoner.

Discerned force chains help manufacturers not only with functional benefits like increased inflexibility and responsiveness and enabling better demand planning but also help take a request-aft view of effects in which the requirements of product development, guests, and requests are taken into account all at formerly.

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In recent years the cost of producing organic produce in the United States has decreased largely due to technological advancement. At the same time, more and more Americans prefer organic produce over conventional produce.
How will this affect the equilibrium price and equilibrium quantity, that is, do price and quantity increase or decrease, or are the answers indeterminate because they depend on the magnitudes of the shifts?

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The cost of growing organic vegetables has recently shifted to the right in both the supply and demand curves. The equilibrium quantity has increased as a result, with an unknown impact on the equilibrium price.

A Movement to the Right of the Supply Curve "A Shift to the Right of the Supply Curve" A shift to the right of the supply curve represents an increase in supply; the curve shifts in the direction of increasing quantity with respect to the horizontal axis.

When demand is steady and supply is increasing, the supply curve moves to the right, creating an intersection where quantity and prices are lower. On the other hand, a negative change in supply causes the curve to move to the left, raising prices and lowering quantity.

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Advertising Media Alternatives When developing the advertising program, firms must choose between the various forms of media available. Each of the eight common media types has distinct advantages and disadvantages associated with it. Students will identify a strength and weakness for five of the most commonly utilized media types. In deciding where to place advertisements, a company has several media types to choose from and a number of alternatives, or vehicles within each medium. Often advertisers use a mix of media forms and vehicles to maximize the exposure of the message to the target audience while minimizing the costs. To make optimal decisions on media choices, firms must be aware of the types of media available to them as well as understand each medium's strengths and weaknesses. Roll over each item to read the hint. Drag and drop each of the advantages and disadvantages to the appropriate media type, then drag and drop an example of each media type onto the appropriate category. Answers and Descriptions to fill in the blanks. Low cost, local targets Low cost, uses sound, ability to target local audiences Long lead time high cost Long lead time to prepare ad. relatively high cost High cost, low exposure High cost to prepare ads, very short exposure time Lacks visual Lacking visual element, short exposure time Miller Lite Polo Ralph Lauren Credit card offers Running a 30-second advertisement for Miller Lite beer during Sunday Night Football costing nearly $340.000 During his commute on the New York City subway this morning, Samuel noticed an ad for Polo Ralph Lauren cologne inside the subway car. Each day. Sarah receives 3 to 5 credit card solicitation letters in her mailbox. Superior targeting Negative perception High quality color ad. superior targeting ability, can convey complex messages with detail High cost per contact, negative public perception Little targeting Message must be very short/simple, little targeting, traffic hazard Large audience Reaches large audiences using picture, print, sound, and motion Can be personalized Wendy's High selectivity of audience, can be personalized, high quality graphics While driving to campus this morning. Kelly hears a commercial for Wendy's. High visibility Low cost, high visibility, many repeat exposures

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The table below represents a summary of the advantages and disadvantages of each medium.

                                             Advantage        Disadvantages      

Television Advertising     Large Audience       High Cost,

                                                                             low exposure

Radio Advertising            Low cost,                  Lacks Visual

                                          local targets

Magazine                        Superior Targeting     Long lead time

Advertising                                                         ,high cost

Outdoor Advertising      High Visibility             Little targeting

Direct Mall                       Can be                         Negative perception

                                          personalized

There are different communication channels in advertising such as television, newspapers, radio, direct mail, magazines, yellow pages, online, and offline.

Among the many methods available, marketers are working on choosing the best medium for their marketing, trying to maximize growth while staying within the limits of their budget. The choice of media is not an easy decision and depends on many factors:

Media trends of the target audience: Where the target audience goes and what activities and media they use are the most important factors in choosing the right media.Product characteristics: In some products product characteristics dictate media selection. For example if visual design and colors are the main product features, radio cannot be used as a medium. If the product is complex in nature and requires complex information, advertisements on television or radio will not be suitable because of the short time available. In such cases, magazines will be more appropriate. Details can be placed on the ads and the reader can take the time to read even the video and save the instructions.Cost: Using more than one medium is possible, however, cost is an important consideration. Companies are encouraged to reduce costs since costs reduce profits. Marketers work with a limited budget which makes their job more challenging in choosing the best medium.

Examples:

Television Advertising-Miller Lite

Radio Advertising - Wendy's

Magazine Advertising- Nike AirMAX

Outdoor Advertising -Polo Ralph Lauren

Direct Mall  -Credit card offers

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the output level for a monopolistically competitive firm is lower than the output level that achieves the minimum average total cost for the firm and, as such:

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The output level for a monopolistically competitive firm is lower than the output level that achieves the minimum average total cost for the firm and, as such, is not productively efficient in the long run.

Monopolistic competition occurs when many companies offer similar competing products or services but not perfect substitutes. The barriers to entry into a monopolistic competitive industry are low, hence the decisions of any one firm do not directly affect its competitors. A monopolistically competitive firm is not efficient in the long run because it does not produce at the minimum of its average total cost curve or produce where P = MC. Thus, a monopolistically competitive firm will tend to produce a lower quantity at a higher cost and charge a higher price than a perfectly competitive firm.

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Martinez Company�s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows: Amount per Unit Direct Materials $6.00, Direct Labor $3.50, Variable manufacturing overhead $1.50, Fixed Manufacturing overhead $4.00, Fixed selling expense $3.00, Fixed administrative expense $2.00, Sales Commissions $1.00, and Variable administrative expense $0.50.

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The total amount to make the product will be your labor,materials,and overhead.

Materials $6 + Labor $3.5 + Overhead (fixed and variable) $5.5 (1.50 + 4) = $15 * 10,000 = 150,000.The total amount to sell the product will be a fixed sale of $3 + fixed administration $2 + commission $1 + variable administration $0.50 = $6.50 * 10,000 = 65,000.Variable cost per unit will be all the variable costs added together.Materials, labor, variable overhead,commissions,variable administrative expenses.6 + 3.5 + 1.5 + 1 + 0.50 = $12.50.Variable cost per unit will be all variable costs added materials,labor,variable overhead,commissions,variable administrative expenses 6+3.5+1.5+1+0.50 = $12.50.5. 12.50*8,000=100,000. 12.50*12,500=156,250.Fixed manufacturing 4.00*10,000 = 40,00040,000/8,000=5.00.Crafting fixed 4.00*.The total incremental costs Martinez will incur if it increases production from 10,000 to 10,001 units is $11.The next step is to determine the incremental cost Incremental cost of production=Unit variable cost×Units increased Incremental cost of production=$11 × 1 unit.

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