Answer:
A
C
D
E
Explanation:
fiscal policies are steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.
fiscal policies can either be expansionary or contractionary
Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes.
Contractionary fiscal policy reduces money supply
tools of fiscal policy
Taxes
government spending
transfer payments
Marigold Batteries is a division of Enterprise Corporation. The division manufactures and sells a long-life battery used in a wide variety of applications. During the coming year, it expects to sell 60,000 units for $32 per unit. Nyota Uthura is the division manager. She is considering producing either 60,000 or 90,000 units during the period. Other information is presented in the schedule.
Division Information for 2017
Beginning inventory 0
Expected sales in units 60,000
Selling price per unit $33
Variable manufacturing costs per unit $13
Fixed manufacturing overhead costs (total) $540,000
Fixed manufacturing overhead costs per unit:
Based on 60,000 units $9 per unit ($540,000 + 60,000)
Based on 90,000 units $6 per unit ($540,00090,000)
Manufacturing cost per unit:
Based on 60,000 units $22 per unit ($13 variable + $9 fixed)
Based on 90,000 units $19 per unit ($13 variable + $6 fixed)
Variable selling and administrative expenses $5
Fixed selling and administrative
expenses (total) $50,000
(1) Prepare an absorption costing income statement, with one column showing the results if 60,000 units are produced and one column showing the results if 90,000 units are produced.
(2) Prepare a variable costing income statement, with one column showing the results if 60,000 units are produced and one column showing the results if 90,000 units are produced.
Answer:
Marigold Batteries
A Division of Enterprise Corporation
1) Income Statement, absorption costing:
60,000 Units 90,000 Units
Sales revenue $1,980,000 $2,970,000
Manufacturing costs:
Variable manufacturing costs 780,000 1,170,000
Fixed manufacturing costs 540,000 540,000
Total manufacturing costs $1,320,000 $1,710,000
Gross profit $660,000 $1,260,000
Expenses:
Variable selling and admin 300,000 450,000
Fixed selling and admin 50,000 50,000
Total expenses $350,000 $500,000
Net income $310,000 $760,000
2) Income Statement, variable costing:
60,000 Units 90,000 Units
Sales revenue $1,980,000 $2,970,000
Variable costs:
Variable manufacturing costs 780,000 1,170,000
Variable selling and admin 300,000 450,000
Total variable costs $1,080,000 $1,620,000
Contribution margin $900,000 $1,350,000
Fixed costs:
Fixed manufacturing costs 540,000 540,000
Fixed selling and admin 50,000 50,000
Total fixed costs $590,000 $590,000
Net income $310,000 $760,000
Explanation:
a) Data and Calculations:
Selling price per unit = $32
Expected unit sales 60,000 90,000
Production units 60,000 90,000
Beginning inventory = 0
Selling price per unit = $33
Variable manufacturing costs = $13 per unit
Fixed manufacturing costs = $540,000
Variable selling and administrative expenses = $5
Fixed selling and administrative expenses = $50,000
b) The key difference lies with the treatment of fixed and variable costs. With absorption costing, the fixed manufacturing costs are included in the costs of products. With variable costing, they are treated as period costs or expenses. Also, with variable costing, variable selling and administrative costs are included in the variable costs of the products. The variable costing method calculates the contribution margin before deducting the fixed expenses to arrive at the net income. On the other hand, the absorption costing method calculates the gross profit instead of the contribution margin.
This year Randy paid $28,900 of interest on his residence. (Randy borrowed $462,000 to buy his residence, and it is currently worth $512,000.) Randy also paid $2,800 of interest on his car loan and $4,650 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances
Answer:
a. Interest Deductible = $31,100
b. Interest Deductible = $28,900
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
This year Randy paid $28,900 of interest on his residence. (Randy borrowed $462,000 to buy his residence, and it is currently worth $512,000.) Randy also paid $2,800 of interest on his car loan and $4,650 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances?
a. Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000.
Interest Deductible $.......
b. Randy had no investment income this year, and his AGI is $75,000.
Interest Deducttible $.......
The explanation of the anwer is now given as follows:
a. Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000.
Randy may choose to deduct the interest of $28,900 on his residence as an itemized deduction.
The $2,800 of interest on his car loan is a nondeductible personal interest.
The $2,200 interest income received can be regarded as an investment income.
The $4,500 margin interest to his stockbroke is likely investment interest. But since Randy has only $2,200 interest income, his deduction is limited to the $2,200.
Therefore, we have:
Interest Deductible = Interest on his residence + $2,200 = $28,900 + $2,200 = $31,100
b. Randy had no investment income this year, and his AGI is $75,000.
Since there is no investment income, Randy can only dedcut the interest of $28,900 on his residence based on the explanation in part a above.
Therefore, we have:
Interest Deductible = $28,900
Labor unions are organizations of employees formed to protect and advance their members' interests by bargaining with management over job-related issues.
a. True
b. False
Answer:
I think that the correct answer is True
Assume the following: The standard labor rate per hour is $17.00. The standard labor-hours allowed per unit of finished goods is 3 hours. The actual quantity of labor hours worked during the period was 44,000 hours. The total actual direct labor cost for the period was $726,000. The company produced 15,000 units of finished goods during the period. What is the labor efficiency variance
Answer: $17,000
Explanation:
Labour efficiency variance = Standard rate * (Standard hours - Actual hours )
Standard hours:
= Standard labor-hours allowed per unit * Number of units produced in period
= 3 * 15,000
= 45,000 hours
Labor efficiency variance = 17 * (45,000 - 44,000)
= $17,000 Favorable
Favorable because the standard amount is higher than the actual amount.
Given the information below, answer the following two questions. Firm A Firm B Q 1000 1000 P 1 1 V 0.7 0.2 FC 200 700 A given change in Q will result in a larger change in EBIT for Firm ___ A. A B. B C. More information is needed to answer this question
Answer:
Firm A and Firm B
C. More information is needed to answer this question
Explanation:
a) Data and Calculations:
Firm A Firm B
Q 1000 1000
P 1 1
V 0.7 0.2
Contr 0.3 0.8
FC 200 700
EBIT 100 100
b) More information is certainly required to answer this question. Specifically, the direction of the given change in Q is not indicated. The answer will become clearer with this information. The question to ask is this: is the given change in Q an increase or a decrease?
Suppose Dr. Chu decided to open a donuts shop call Dr. Donuts. Dr. Chu is able to source flours at $2 per pound (making 40 donuts), sugars at $5 per pound (making 100 donuts), and butter at $1 per pound (making 100 donuts) While the donuts are not very tasty, Dr. Chu believes he can sell a lot of them by pricing them at $0.36 per donuts. Assuming his rent is $1800 per month, corporate tax of $100 per month, and draws a salary of $200 a day (use 30 days in a month), how many donuts must Dr. Chu sell in a month to break-even.
Answer:
31,600 donuts
Explanation:
Break even point is the level of activity where a company makes neither a profit nor a loss.
Break even point (units) = Fixed Costs ÷ Contribution per unit
where,
Contribution per unit = Sales per unit - Variable Costs per unit
Step 1 : Sales per donut
Sales per donut = $0.36
Step 2 : Variable Cost per Donut
Variable Cost per Donut :
Flours ($2 ÷ 40) $0.05
Sugars ($5 ÷ 100) $0.05
Butter ($1 ÷ 100) $0.01
Total $0.11
Step 3 : Fixed cost per month
Rent $1,800
corporate tax $100
Salary ($200 x 30) $6,000
Total $7,900
therefore,
Break even point = $7,900 ÷ ($0.36 - $0.11)
= 31,600 donuts
Conclusion :
Dr. Chu sell 31,600 donuts in a month to break-even.
Explain how planning involves making decisions today that will have an impact later.
Planning is figuring out what you will do and when. If you plan to play video games instead of doing homework, then tomorrow at school you will get in trouble. If you plan on dropping out of high school, later in life you will not be able to get as many jobs.
Answer: Decision making is the core of planning. Unless a decision has been made, a plan cannot be implemented in the field. ... Decisions can be made without planning but planning cannot be done without making decisions. Planning can be defined as the process of selecting a future course of action.\
A product sells for $210 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 after tax income (assume a 30% tax rate), how many units must be sold
Answer:
5,688 units
Explanation:
Target sales = Target Profit + Fixed Costs ÷ Contribution per unit
where,
Contribution per unit = Sales - Variable Costs
= $210 - $130 = $80
therefore,
Target sales = ($35,000 + $420,000) ÷ $80 = 5,688 units
How can students experience "free rider" problems at school?
CHOOSE ALL THAT APPLY
Students who copy others students' homework.
Students who don't do their fair share of work on a group project, but expect to get the same grade as students who worked hard on the project.
Students who cheat off of a others student during an exam.
Answer:
All of the above
Explanation:
these are all reasons on how you can experience being a free rider
Ray's Pizzeria is considering the addition of a 5th worker if this increases profit. Pizza sales increased from 300 per day to 360 per day when the 4th worker was added, indicating that the marginal product of the 4th worker was equal to blank1 - Numeric Answer Type your answer here Please type your answer to submit pizzas. If adding a 5th worker increases sales from 360 to 400, the marginal product of the fifth worker is blank2 - Numeric Answer Type your answer here pizzas.
Answer:
60 pizzas
40 pizzas
Explanation:
Marginal product measures the change in output as a result of a change in input by one unit
Marginal product = change in output / change in input
Marginal product for the 4th worker
Change in output = 360 - 300 = 60 pizzas
Change in input = 4 - 3 = 1 worker
Marginal product = 60 / 1 = 60
Marginal product for the 5th worker
Change in output = 400 - 360 = 40 pizzas
Change in input = 5 - 4 = 1
Marginal product = 40 / 1 = 40
It can be seen that marginal product decreased from 60 to 40 when the 5th worker was added. This illustrates diminishing marginal returns.
The law of diminishing returns says as more units of a variable input is added to a fixed income of production, output might increase at a point but after some time total output would increase at a decreasing rate and marginal product would be decreasing.
Transformational leaders enhance performance of employees by ________. Group of answer choices Restricting creativity among employees Focusing on short-term goals for employees Instilling pride in employees and gaining their respect and trust Establishing goals, roles, and requirements
Answer:
gaining their respect and trust establishing goals roles and requirements
Pls hurry ! In your own words, why is using an outline to take notes a good strategy?
Answer:
It is better used to locate things.
Explanation:
Answer:
helps organize your ideas
Explanation:
edg 2021
Earley Corporation issued perpetual preferred stock with an 8% annual dividend. The stock currently yields 6%, and its par value is $100. Round your answers to the nearest cent. What is the stock's value
Answer:
Value of stock = $133.33
Explanation:
The value of a preferred stock is the present value of the constant dividend payable for the foreseeable future discounted at the required rate of return
Price = Constant dividend/ required return
The constant dividend = Dividend rate × par value= 8%*100= 8
Requited return - 6%
So the price of the stock would be
Price = 8/0.06=133.33
Value of stock = $133.33
1) The company purchased $12,100 of merchandise on account under terms 3/10, n/30. 2) The company returned $1,600 of merchandise to the supplier before payment was made. 3) The liability was paid within the discount period. 4) All of the merchandise purchased was sold for $18,200 cash. What is the gross margin that results from these four transactions
Answer:
$8,910
Explanation:
Trading Account for the year
Sales $18,200
Less Cost of Sales
Purchases $12,100
Less Purchases Returns ($1,600)
Less Discounts Received ($12,100 x 10%) ($1,210) ($9,290)
Gross Profit $8,910
Conclusion :
thus, the gross margin that results from these four transactions is $8,910.
One of the biggest differences between men and women consumers is that men tend to stay loyal to a store. Women are much more ready to shop around-- perhaps because they demand more from their products than men. Andrea purchased a copy of Fit magazine because it contained an article about selecting the right jogging suit. The enduring belief that it is a person:______.
Answer:
Since marketing is the process of creating, communicating and delivering products to customers with the aim of satisfying their needs, the purpose of a marketing philosophy is to identify and fulfill those needs, as well as wants and demands.
Cora purchased a hotel building on May 17, 2020, for $3,000,000. Determine the cost recovery deduction for 2021. a.$76,920 b.$69,000 c.$48,150 d.$59,520
Answer: $76920
Explanation:
Firstly, we should note that the hotel building is simply non residential and then qualifies to be part of 39 year property.
Then, the cost of recovery will be:
= 1/39 × Cost of the hotel
= 1/39 × $3,000,000
= $76,920
Therefore, the cost recovery deduction for 2021 is $76,920
• The Vice President of Customer Service has expressed concern over a project in which you are involved. His specific concern is with the staff you have identified to work on a project to migrate the corporate website from the data center to the cloud. The project sponsor insists that you need to cut down on your project staff. You are the project manager. What resources do you think are really necessary for this project? How would you respond to the project sponsor to defend your staffing plan?
Answer: A. The VP of customer service is correct. Since the cost was not taken into account at the beginning of the project, the project should not go forward as planned. Project initiation should be revisited to examine the project plan and determine how changes can be made to accommodate customer service. B.
Explanation:
The graph below shows how the price of wheat varies with the demand quantity.
Suppose that lower production costs increases the supply of wheat, such that more wheat is supplied at each price level. The new equilibrium price (after the increase in supply) is _____.
$3
$4
Answer:
3
Explanation:
its because of rightward shift on the graph
A process with no beginning work in process, completed and transferred out 84300 units during a period and had 50300 units in the ending work in process inventory that were 20% complete. The equivalent units of production for the period for conversion costs were:
Answer:
$94,360
Explanation:
Calculation to determine what The equivalent units of production for the period for conversion costs were
Equivalent units of production=[$84,300+ ($50,300 * 20% ]
Equivalent units of production=$84,300+$10,060
Equivalent units of production=$94,360
Therefore The equivalent units of production for the period for conversion costs were $94,360
For each of the following situations, state whether total revenue received by the seller increases, decreases, or does not change.
a. If price elasticity of demand is -1.00 and price increases, total revenue.
b. If price elasticity of demand is -0.02 and price increases, total revenue
c. If price elasticity of demand is 5.00 and price increases, total revenue
d. If price elasticity of demand is-0.131 and price decreases, total revenue
e. If price elasticity of demand is -3.33 and price decreases, total revenue
Answer:
doesn't change
increases
decreases
decreases
increase
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
a. Demand is unit elastic and if price increases, quantity demanded would change by the same amount and total revenue would remain the same
b. Demand is inelastic. If prices increases, there would be little or no change in quantity demanded and revenue would increase
c. Demand is elastic. Increase in price would lead to a reduction in quantity demanded and total revenue would fall
Demand is inelastic, if prices are decreased, there would be little or no change in quantity demanded and revenue would fall
Demand is elastic. A decrease in price would increase the quantity demanded and total revenue would rise
Income Statement; Net Loss The following revenue and expense account balances were taken from the ledger of Acorn Health Services Co. after the accounts had been adjusted on January 31, 20Y7, the end of the fiscal year: Depreciation Expense $16,900 Insurance Expense 8,280 Miscellaneous Expense 6,590 Rent Expense 68,300 Service Revenue 324,500 Supplies Expense 4,060 Utilities Expense 26,030 Wages Expense 255,200 Prepare an income statement. Acorn Health Services Co. Income Statement For the Year Ended January 31, 20Y7
Answer:
See below
Explanation:
Acorn Health Services Co.
Income statement for the year ended, January 31st
Service revenue $234,500
Expenses:
Depreciation expense
$16,900
Insurance expense
$8,280
Miscellaneous expense
$6,590
Rent expense
$68,300
Supplies expense
$4,060
Utilities expense
$26,030
Wages expense
$255,200
Total expense ($385,360)
Net income (loss) $150,860
Identify the term being described for each of the following: A - sequence of activities in a project. B - The longest time sequence of activities in a project C - Used when two activities have the same starting and finishing points. D - The difference in time length of any path and the critical path. E - The statistical distribution used to describe variability of an activity time. F - The statistical distribution used to describe path variability an activity by allocating additional resources.
Answer: See explanation
Explanation:
A - sequence of activities in a project. = A path
B - The longest time sequence of activities in a project = Critical path
C - Used when two activities have the same starting and finishing points. = Critical activity
D - The difference in time length of any path and the critical path. = The path slack
E - The statistical distribution used to describe variability of an activity time. = Beta distribution.
F - The statistical distribution used to describe path variability an activity by allocating additional resources. = Normal distribution
Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are plannned for the year 20x1. Five units of raw material are required to produce each unit of finished product. January 1 December 31 Raw material 42,000 49,000 Work in process 19,000 19,000 Finished goods 92,000 75,000 Required: 1. If Bodin Company plans to sell 476,000 units during the year, compute the number of units the firm would have to manufacture during the year. 2. If 508,000 finished units were to be manufactured by Bodin Company during the year, determine the amount of raw material to be purchased.
Answer and Explanation:
The computation is shown below:
1. The number of units to be manufactured during the year is
= Selling units + ending finished goods - opening finished goods
= 476,000 units + 75,000 units - 92,000 units
= 459,000 units
2. The raw material purchased amount is
= (508,000 × 5) + 49,000 - 42,000
= $2,547,000
The same would be relevant
Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $18 each and used a budgeted selling price of $18 per unit. Actual Budgeted Units sold 45,000 units 31,000 units Variable costs $161,000 $150,000 Fixed costs $44,000 $50,000 What is the static-budget variance of variable cost
Answer:
See below
Explanation:
Core Corporation reported current earnings and profits of $250,000. Core distributed a building with an adjusted basis of $170,000 and a fair market value of $230,000 to its sole shareholder. The building had a mortgage of $90,000, which the shareholder will assume. What is the amount of the dividend received by the shareholder?
A. $80,000.
B. $140,000.
C. $230,000.
D. $250,000.
Answer:
B. $140,000
Explanation:
The total cost of acquiring an asset, including the installation, commission, transportation and other relevant fees is known as adjusted basis. The fair market value is the value an asset would yield when sold. It is an amount that would be received in return when an asset is sold.
Therefore, the shareholders would receive dividend at the fair market value adjusted for the mortgage balance
= $230,000 - $90,000
= $140,000
The units of an item available for sale during the year were as follows:
Jan. 1 Inventory 1,000 units at $120
Feb. 17 Purchases 1,375 units at $128
July 21 Purchases 1,500 units at $136
Nov. 23 Purchases 1,125 units at $140
There are 1,200 units of the item in the physical inventory at December 31. The Inventony periodic inventory system is used.
a. Determine the inventory cost by the first-in, first-out method.
b. Determine the inventory cost by the last-in, first-out method.
c. Determine the inventory cost by the weighted average cost method.
Answer:
FIFO LIFO Weighted Average
Inventory cost = $167,700 $145,600 $157,800
Explanation:
a) Data and Calculations:
Jan. 1 Inventory 1,000 units at $120 $120,000 $120,000
Feb. 17 Purchases 1,375 units at $128 176,000 296,000
July 21 Purchases 1,500 units at $136 204,000 500,000
Nov. 23 Purchases 1,125 units at $140 157,500 657,500
Dec. 31 Total units 5,000 $657,500
Dec. 31 Inventory 1,200
Dec. 31 Units sold 3,800
Inventory cost by:
FIFO ( first-in, first-out method)
July 21 Purchases 75 units at $136 $10,200
Nov. 23 Purchases 1,125 units at $140 157,500
Dec. 31 Inventory 1,200 $167,700
LIFO (last-in, first-out method)
Jan. 1 Inventory 1,000 units at $120 $120,000
Feb. 17 Purchases 200 units at $128 25,600
Dec. 31 Inventory 1,200 $145,600
Weighted-Average Cost Method
Total cost of goods available/Total units available for sale
= $657,500/5,000
= $131.50 per unit
Inventory cost = $157,800 ($131.50 * 1,200)
PepsiCo, Inc. (PEP), the parent company of Frito-LayTM snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years: Year 2 (in millions) Year 1 (in millions) Cash and cash equivalents $ 9,096 $ 6,134 Short-term investments, at cost 2,913 2,592 Accounts and notes receivable, net 6,437 6,651 Inventories 2,720 3,143 Prepaid expenses and other current assets 1,865 2,143 Short-term obligations (liabilities) 4,071 5,076 Accounts payable and other current liabilities 13,507 13,016 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.
Answer:
Current ratio
Year 1 = 1.3
Year 2 = 1.1
Quick ratio
Year 1 = 1.0
Year 2 = 0.8
Explanation:
Current ratio is the ration of a company's current assets to the current liabilities while the quick ratio is similar to the current asset except that the prepaid expenses and inventories are excluded from the determination of the assets.
Current assets
Year 1 = 9,096 + 2,913 + 6,437 + 2,720 + 1,865
= $ 23,031.00
Year 2 = 6,134 + 2,592 + 6,651 + 3,143 + 2,143
= $ 20,663.00
Current Liabilities
Year 1 = 4,071 + 13,507
= $ 17,578.00
Year 2 = 5,076 + 13,016
= $ 18,092.00
Current ratio
Year 1 = $ 23,031.00/$ 17,578.00
= 1.3 ( to 1 decimal place)
Year 2 = $ 20,663.00/$ 18,092.00
= 1.1 to 1 decimal place
Quick ratio
Year 1
= (23,031.00 - 2,720 - 1,865)/ 17,578.00
= 1.0 to 1 decimal place
Year 2
= (20,663.00 - 3,143 - 2,143)
= 0.8 to 1 decimal place
You are the manager of a firm that manufactures front and rear windshields for the automobile industry. Due to economies of scale in the industry, entry by new firms is not profitable. Toyota has asked your company and your only rival to simultaneously submit a price quote for supplying 100,000 front and rear windshields for its newest version of the Highlander. If both you and your rival submit a low price, each firm supplies 50,000 front and rear windshields and earns a zero profit. If one firm quotes a low price and the other a high price, the low-price firm supplies 100,000 front and rear windshields and earns a profit of $11 million and the high-price firm supplies no windshields and loses $2 million. If both firms quote a high price, each firm supplies 50,000 front and rear windshields and earns a $6 million profit. Determine your optimal pricing strategy if you and your rival believe that the new Highlander is a "special edition" that will be sold only for one year. Would your answer differ if you and your rival were required to resubmit price quotes year after year and if, in any given year, there was a 60 percent chance that Toyota would discontinue the Highlander? Explain.
Answer:
a. The optimal pricing strategy will be one-shot Nash equilibrium in which “You” charge low price, “Your Rival” charge low price and then the payoff is ($0, $0)
b. Yes, the anwer will differ becuase it is not possible to sustain the collusive outcome as a Nash equilibrium because [tex]\pi ^{Cheat}[/tex] > [tex]\pi ^{Cooperate}[/tex].
Explanation:
a. Determine your optimal pricing strategy if you and your rival believe that the new Highlander is a "special edition" that will be sold only for one year.
Note: See the attached excel file for the Representation of one shot normal for of the game played between "You" and "Your Rival" together with the payoffs.
From the attached excel file, the dominant strategy is for “You” and “Your Rival” to charge “Low Price” each. If the dominant strategy is played by “You” and “Your Rival”, the optimal pricing strategy will be one-shot Nash equilibrium in which “You” charge low price, “Your Rival” charge low price and then the payoff is ($0, $0).
b. Would your answer differ if you and your rival were required to resubmit price quotes year after year and if, in any given year, there was a 60 percent chance that Toyota would discontinue the Highlander? Explain.
When we have a year-after-year competition between “You” and “Your Rival” but with a 60 percent chance that Toyota would discontinue the Highlander, the payoffs of the firm that continue to comply with the collusive strategy of charging “High Price” by each firm under the normal trigger strategy whereby “You” and “Your Rival” agree to charge high price as long as there is no past deviation by any of the firm, otherwise charge a low price is as follows:
[tex]\pi ^{Cooperate}[/tex] = $6 + $6(100% - 60%) + $6(100% - 60%)^2 + 6(100% - 60%)^2 …….
[tex]\pi ^{Cooperate}[/tex] = $6 / 6% = $10
Therefore, what the firm that cheats earn today is $11 million and it earns $0 forever. The implication of this is that [tex]\pi ^{Cheat}[/tex] = $11
Therefore, the anwer will differ becuase it is not possible to sustain the collusive outcome as a Nash equilibrium because [tex]\pi ^{Cheat}[/tex] > [tex]\pi ^{Cooperate}[/tex].
what is marketing strategies
Answer:
A marketing strategy refers to a business's overall game plan for reaching prospective consumers and turning them into customers of their products or services :)
Explanation:
In other words!
It refers to a business's overall game plan for getting more costumers and more money with the work of their products and services.
Black Oil Company considered building a service station in a new location. The owners and their accountants decided that this was the profitable thing to do. However, soon after they made this decision, both the interest rate and the cost of building the station changed. In which case do these changes both make it less likely that they will now build the station?
Answer: An increase in the Interest rates and the cost of building the station
Explanation:
Before setting out to do business, most companies and investors calculate the cost of setting up the business and what they stand to gain when the business does well and when it doesn't. Most of these analysis are done when the business is being put into consideration. When there is a change in cost of any of the items put into consideration, the business would either be carried out or cancelled. What could discourage the Black oil company would be either an increase in interest rates or cost of building the station.
