1. Give an example of a government-created monopoly. Is creating this monopoly necessarily bad public policy? Explain.
2. Define natural monopoly. What does the size of a market have to do with whether and industry is a natural monopoly or not?
3. Why is a monopolist’s marginal revenue less than the price of its good? Can marginal revenue ever be negative? Explain.
4. What is the profit-maximizing level of output and profit-maximizing price for a monopoly? Explain in terms of demand, marginal revenue, average total cost, and marginal costs.
5. Does a monopoly produce more or less output than the level of output that maximizes total surplus?
6. Why does deadweight loss result from a monopoly?
Give two examples of price discrimination. In each case, explain why the monopolist chooses to follow this business strategy
In: Economics
Determine the required ADR to achieve the owner's goal of earning an ROI of 15%. (20 points)
| Investment | $800,000 | ||
| Debt | $1,500,000 | ||
| ROI | 20% | ||
| Interest rate | 8% | ||
| Income tax rate | 20% | ||
| Property taxes | $100,000 | ||
| Fire insurances | $30,000 | ||
| Depreciation | $200,000 | ||
| Undistributed operating expenses (fixed) | $200,000 | ||
| Undistributed operating expenses (Variable) | 5% | of total room revenue | |
| Management fee | 5% | of total room revenue | |
| Rooms department expenses (fixed) | $20,000 | ||
| Rooms department expenses (Variable) | 15% | of total room revenue | |
| Expected paid occupancy | 80% |
In: Accounting
A semiprofessional baseball team near your town plays two home games each month at the local baseball park. The team splits the concessions 50/50 with the city but keeps all the revenue from ticket sales. The city charges the team $100 each month for the three-month season. The team pays the players and manager a total of $1000 each month. The team charges $10 for each ticket, and the average customer spends $8 at the concession stand. Attendance averages 30 people at each home game.
1st attempt
Part 1 (4 points)
The team earns an average
of $ in revenue for each game
and $ of revenue each
season.
With total costs of $ each
season, the team finishes the season
with $ of profit.
Part 2 (1 point)
In order to break even, the team needs to sell tickets for each game. Round to the nearest whole number.
In: Economics
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed.
Required:
1. How much revenue should Manhattan Today recognize upon receipt of the $130 subscription price?
2. How many performance obligations exist in this contract? 3. Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
In: Accounting
The following table represents a student’s demand schedule for Starbucks that is available off campus.
|
Product Price |
Quantity Demanded |
Total Revenue |
|
$14 |
3 |
|
|
12 |
6 |
|
|
10 |
9 |
|
|
8 |
12 |
|
|
6 |
15 |
|
|
4 |
18 |
|
|
2 |
21 |
A)Fill in the table and graph the demand curve and the total revenue curve on two separate graphs
B)Based on your previous answer, use the midpoint formula to calculate the price elasticity of demand for price changes on the upper and lower end of the demand curve.
C)What is the special relationship between unit elasticity and total revenue?
D)What is the formula for income elasticity of demand? What is the interpretation of income elasticity when the coefficient (Ei) is positive and/or negative?
E)What is the formula of cross elasticity of demand? What is the interpretation of cross elasticity when the coefficient (Exy) is positive and/or negative?
In: Economics
The number of units of a product demanded each month is a linear function of the selling price of the item. At a selling price of $10, 400 units of the product are demanded each month, and 100 units of the product are demanded each month at a selling price of $25 per item. The company that produces the product has monthly fixed costs of $1000 and each unit costs the company $4 to produce.
no calculus please!
In: Accounting
M4-16 Reporting a Balance Sheet [LO 4-4]
|
The Sky Blue Corporation has the following adjusted trial balance at December 31. |
| Debit | Credit | |||||
| Cash | $ | 1,290 | ||||
| Accounts Receivable | 2,600 | |||||
| Prepaid Insurance | 2,900 | |||||
| Notes Receivable (long-term) | 3,600 | |||||
| Equipment | 15,000 | |||||
| Accumulated Depreciation | $ | 3,800 | ||||
| Accounts Payable | 6,020 | |||||
| Salaries and Wages Payable | 1,300 | |||||
| Income Taxes Payable | 3,500 | |||||
| Unearned Revenue | 720 | |||||
| Common Stock | 3,000 | |||||
| Retained Earnings | 1,240 | |||||
| Dividends | 360 | |||||
| Sales Revenue | 47,430 | |||||
| Rent Revenue | 360 | |||||
| Salaries and Wages Expense | 22,800 | |||||
| Depreciation Expense | 1,900 | |||||
| Utilities Expense | 4,820 | |||||
| Insurance Expense | 2,000 | |||||
| Rent Expense | 6,600 | |||||
| Income Tax Expense | 3,500 | |||||
| Total | $ | 67,370 | $ | 67,370 | ||
| 1. |
Prepare a classified balance sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.) |
In: Accounting
Your company is considering three mutually exclusive investments as described in the table below. Based on a 15-year study period and 10% MARR, you are tasked to determine which investment should be selected. Investment Option 1: Initial Investment: $56,000 Net Annual Revenue: $9,000 Salvage Value: $5,000 Useful Life: 22 Investment Option 2: Initial Investment: $80,000 Net Annual Revenue:$11,500 Salvage Value: $5,000 Useful Life: 15 Investment Option 2: Initial Investment: $76,000 Net Annual Revenue: $11,000 Salvage Value: $3,000 Useful Life: 11 Note: The repeatability assumption cannot be applied. Hint: imputed market value technique will need to be applied to Investment 1 and assume cotermination at 15-years with reinvestment for Investment 3. What is PW of each options? What is the PW of the Investment option 1?
In: Economics
The trial balance of Kingbird, Inc. on March 31, 2017, is as
follows:
| Kingbird, Inc. | ||||
| Trial Balance | ||||
| March 31, 2017 | ||||
| Debit | Credit | |||
| Cash | $1,850 | |||
| Accounts receivable | 2,740 | |||
| Supplies | 645 | |||
| Equipment | 6,050 | |||
| Accumulated depreciation—equipment | $80 | |||
| Accounts payable | 1,035 | |||
| Unearned revenue | 460 | |||
| Common shares | 6,220 | |||
| Retained earnings | 1,670 | |||
| Sales revenue | 2,490 | |||
| Salaries and wages expense | 545 | |||
| Miscellaneous expense | 125 | |||
| $11,955 | $11,955 | |||
Additional information:
| 1. | A physical count reveals only $540 of supplies on hand. | |
| 2. | Equipment is depreciated at a rate of $20 per month. | |
| 3. | Unearned ticket revenue amounted to $105 on March 31. | |
| 4. | Accrued salaries are $720. |
Enter the trial balance on a work sheet and complete the work
sheet, assuming that the adjustments relate only to the month of
March. (Ignore income taxes.)
In: Accounting
2) S&P Supply sells only two products, Product S and Product P.
|
Product S |
Product P |
||
|
Selling price per unit |
$25 |
$50 |
|
|
Variable cost per unit |
$20 |
$30 |
|
|
Fixed costs |
$225,000 |
a) What is the firm’s breakeven sales in dollars, assuming a sales (revenue) mix of 20% Product S and 80% Product P?
b). Suppose the firm generated the amount of sales in dollars needed to break even, assuming a sales mix of 20% Product S and 80% Product P. If the firm’s actual sales mix was 25% Product S and 75% Product P, total profits would be:
CHOOSE ONE: POSITIVE NEGATIVE ZERO
c.) If the firm’s actual profits were $90,000 with a revenue mix of 20% Product S and 80% Product P, what was total revenue from Product P?
In: Accounting