As shown in Diagram 2, the consumer burden of tax is greater than that of a producer as price increases due to the irresponsiveness of demand to changes in price. Therefore the effectiveness of
c). The transfer price of an intermediate product that has an imperfectly competitive external market for the for the product exists when the transfer price of the intermediate product is given at the point at which the net marginal revenue of the marketing division of the firm is equal to the marginal cost of the production division at the best total level of output of the intermediate product, and the price charged in the external market is given on the external demand curve. DQ13) The advantages of cost plus pricing is that it leads to approximately the profit-maximizing price because firms usually apply higher markups for products facing less elastic demand than for products with more elastic demand. p This involves calculating the average variable cost of producing the normal or standard level of output , adding an average overhead charge so as to get the fully allocated average cost for the product. The disadvantages for cost-plus pricing is that it may be very difficult to
The surplus on monopolistic produces increases because they will sell their goods at a high price. These high rates imply that there the social marginal cost will be less than the prices in a monopolistic market. In cost benefit analysis, the opportunity cost will be equal to the marginal costs. The increase in prices is a transfer to the monopolistic firm and not a cost nor a benefit. Question Three Councilor Squeaky is correct because he suggest that there are no efficiency costs while raising the revenue.
Above shows a monopoly diagram. The economic inefficiency is highlighted especially by the welfare loss to the consumer this is because between q0 and q1 the extra benefit of the unit (shown by the price) exceeds the extra cost. Therefore welfare
However, the disadvantages of antidumping are much more than the advantages to some extent. First and foremost, as filing an antidumping case takes amount of time and energy, it will distract firms from its goals and objects thus weaken the overall strengths of the company. If firms concentrated on its main market intention rather than setting an antidumping case, it would be more efficient in achieving its own goal. Second, even if the firm wins the antidumping case, maybe it will lose some sales volume. This is because with the higher price of imports setting by tariff of governments, the price of domestic products also goes up.
According to the principle of supply and demand, when demand is high, prices will rise. Consequently, if prices are too high, consumers will purchase less and demand will go unmet. To fully meet demand, suppliers must charge a price that will result in the required amount of sales while still generating profits for themselves. The number of freshman slots available has not been able to keep up with demand. Demand for a college degree is on the rise, despite the costs associated with obtaining that degree.
: A. making short-run decisions to increase profits that are not in the company's best long-run interests B. creating budgetary slack C. decreasing profits when actual profits are significantly exceeding the profit target D. all of these answers are correct Question 7 An example of a favorable variance is _____. A. actual revenues are less than expected B. actual expenses are less than expected C. material prices are greater than expected D. expected labor costs are less than actual costs Question 8 Differences between the static budget and the flexible budget are due to _____. A. problems of cost control B. poor usage of material and labor C. a combination of price and material variances D. actual activity differing from expected activity levels Question 9 The type of budget that serves as the original benchmark for evaluating performance is called a _____ budget. A. balanced B. cost C. flexible D. static Question 10 Activity-level variances plus flexible-budget variances
At present, Bessemer’s shareholders are hoping for a higher dividend and cutting it would only upset these shareholders. This decision would also signal poor cash flows, lowering the firm’s value with the cut. Along with this, the firm could be up for a hostile takeover if large blocks of stock are liquidated at once. However, with a lowered stock price, aggressive growth investors may be willing to pick up the slack, thus increasing the stock price and avoiding any possible takeover. Another option for Bessemer is to change their dividend strategy entirely.
May 20-21. We might pay your flight! www.nyenrode.nl/imba Many firms strive for a competitive advantage, but few truly understand what it is or how to achieve and keep it. A competitive advantage can be gained by offering the consumer a greater value than the competitors, such as by offering lower prices or providing quality services or other benefits that justify a higher price. The strongest competitive advantage is a strategy that that cannot be imitated by other companies.
15 Marks 3 Nov 09 HL P1 (a) Explain why a firm may practice price discrimination and the necessary conditions for it to take place. 10 Marks (b) “Although a firm may pursue a range of goals, economists usually assume that profit maximization is the main goal.” Discuss this statement. 15 Marks 4 May 09 HL P1 (a) In the theory of the firm, a distinction is made between short-run cost curves and long-run cost curves. Using appropriate cost curve diagrams, explain this distinction. 10 Marks (b) Evaluate the view that greater economic efficiency will always be achieved in perfect competition as compared to monopoly.