Which of the following is true of profits and losses?Profits direct entrepreneurs toward production of goods that are highly valued relative to their cost, while lossesdirect them away from wealth-reducing activities.Profits indicate that the firm is charging prices that are too high, while losses indicate that the firm needs to raiseits prices.Profits indicate that the consumer is getting a bad deal, while losses indicate that the consumer values the producthighly relative to its cost.Profits indicate that the suppliers of resources are underpaid, while losses indicate they are overpaid.

Profit: The profit is the excess of the revenues over expenditure at the given period of time…

Answered: Which of the following is true of…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter9: Market Structure And Long-run Equilibrium

Section: Chapter Questions

Problem 1MC

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You turned down a job at ABC Corp last year that would have paid you $125,000 per year and started your own company. When you calculated your economic profit, it came out at $0. You expect the business will be exactly the same next year. ABC called and said you could still take the job. You should... A. Keep running your company as-is. B. Keep running your company but pay yourself less. C. Keep running your company but pay yourself more. D. Shut down your company and take the job at ABC.
There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through economies of scale government protection control of an important input . b. ABC’s market power does does not guarantee that the firm makes an economic profit.
Why do economists believe that economic profit is the more accurate measure of a business success? Why is economic profit the superior method of determining a business success?
What would change if you found a new niche market to sell your product and your sales jumped to $200,000 and your input costs went up to $30,000? What is your accounting profit? Economic profit? Should you stay in business? Would other firms enter into the market? please show work!
Economic profit is... A-inclouded in the firm’s total opportunity cost . B-equal to normal profit minus total opportunity cost C-equal to total revenue minus marginal cost D-equal to total revenue minus total opportunity cost
The table represents the demand (quantity at each price) for and the total cost to produce a firms product. Complete the last three columns of the table above. a. Based upon the data in your table, how many products will the firm produce and at what price will it sell it product to maximize profit? Will the firm make an economic profit? If so, how much? b. In what type of market structure does this firm participate? How did you decide this?
Should a company produce more goods when marginal revenue is greater than marginal costs? Explain.
Use the following data to analyze the condition when the product price is set at $32. A. How much would be the economic profit that the firm will realize per unit of output? B. What will be the profit-maximizing or loss-minimizing output? C. How much would be the product price, for the firm to be at a break-even position?
Explain why optimal profits should occur when marginal cost equals marginal revenue.
Please answer all 1. Coldwater Bicycle Company operates its factories at capacity and holds a dominant market position in its home country. When it receives a premium priced order from a new customer in another country, it must decide whether to fill that order or continue to supply the full demand in its home market. When it decided not to completely fill the new order, it incurred Group of answer choices a. Sunk costs b. Average costs c. Opportunity costs d. Marginal costs 2. What might happen if a car dealership is awarded a bonus by the manufacturer for selling a certain number of its cars monthly, but the dealership is just short of that quota near the end of the month? Group of answer choices a. Potential buyers will lose buying power at the dealer b. It may sell the remaining cars at huge discounts to hit the quota c. It creates an incentive to sell cars from different manufacturers d. It would ruin the relationship between dealer and manufacturer…
Sarah is planning to start her own cake shop. The cost of making a cake is RM13 each and they are sold at RM45 each. Her estimated monthly cost includes rent (RM1,200) and utilities (RM500). a. Calculate the price markup percentage. b. Determine the break-even point for Sarah. c. How much sales revenue must Sarah make to achieve break-even point? d. If Sarah wants to achieve an annual profit of RM150,000, how many cakes must she sell each month? e. Sarah wants to provide each cake with a packaging box at extra cost of RM2.00 per unit. If she does this, determine the annual sales unit to achieve his annual profit. ,
What is meant by the term economic efficiency. Explain in detail.

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