An energy company has recently enhanced its capabilities for generating electricity, resulting in a 10% reduction in the cost/kwh. The company, which is regulated by the state, is required to pass the savings on to consumers via a 10% reduction in rates/kwh. Assume that the company has 100,000 residential customers who paid an average of $60/month consuming each 500 kwh/month in the year prior to implementing the new system; the same 100,000 customers paid $58/month following the shift to the new system with its lower prices. The total revenue therefore dropped from $6 million per month to $5.8 million per month. Based upon these facts,
What was the increase in volume of electricity that was generated? What was the percentage increase?
Hint: Evaluate first what would have been the average bill if the volume had stayed the same after the fare reduction
Was there a change in the demand function? If so, what is the new demand function? If not, why did the power company have to produce more electricity?
What was the price elasticity in the demand for electricity?
What was the increase in consumer surplus as a result of the reduction in prices?
In: Economics
At the end of the year, a company offered to buy 4,690 units of
a product from X Company for a special price of $12.00 each instead
of the company's regular price of $19.00 each. The following
information relates to the 67,200 units of the product that X
Company made and sold to its regular customers during the
year:
| Per-Unit | Total | ||
| Cost of goods sold | $8.01 | $538,272 | |
| Period costs | 2.53 | 170,016 | |
| Total | $10.54 | $708,288 | |
Fixed cost of goods sold for the year were $130,368, and fixed
period costs were $73,920. Variable period costs include selling
commissions equal to 2% of revenue.
6. Profit on the special order is
| Tries 0/3 |
7. Assume the following two changes for the special order: 1)
variable cost of goods sold will increase by $0.90 per unit, and 2)
there will be no selling commissions. What would be the effect of
these two changes on the special order profit?
| Tries 0/3 |
8. There is concern that regular customers will find out about the
special order, and X Company's regular sales will fall by 500
units. As a result of these lost sales, X Company's profits would
fall by
In: Accounting
At the end of the year, a company offered to buy 4,520 units of
a product from X Company for a special price of $12.00 each instead
of the company's regular price of $17.00 each. The following
information relates to the 66,200 units of the product that X
Company made and sold to its regular customers during the
year:
| Per-Unit | Total | ||
| Cost of goods sold | $8.63 | $571,306 | |
| Period costs | 2.28 | 150,936 | |
| Total | $10.91 | $722,242 | |
Fixed cost of goods sold for the year were $141,668, and fixed
period costs were $69,510. Variable period costs include selling
commissions equal to 2% of revenue.
6. Profit on the special order is
| Tries 0/3 |
7. Assume the following two changes for the special order: 1)
variable cost of goods sold will decrease by $0.84 per unit, and 2)
there will be no selling commissions. What would be the effect of
these two changes on the special order profit?
| Tries 0/3 |
8. There is concern that regular customers will find out about the
special order, and X Company's regular sales will fall by 600
units. As a result of these lost sales, X Company's profits would
fall by
In: Accounting
Splish, Inc. began work on a $6,312,000 contract in 2020 to
construct an office building. During 2020, Splish, Inc. incurred
costs of $1,589,940, billed its customers for $1,156,000, and
collected $894,000. At December 31, 2020, the estimated additional
costs to complete the project total $3,228,060.
Prepare Splish’s 2020 journal entries using the
percentage-of-completion method. (Credit account titles
are automatically indented when amount is entered. Do not indent
manually. For costs incurred use account Materials, Cash, Payables.
If no entry is required, select "No entry" for the account titles
and enter 0 for the amounts.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
| enter an account title to record costs incurred | enter a debit amount | enter a credit amount |
| enter an account title to record costs incurred | enter a debit amount | enter a credit amount |
|
(To record costs incurred.) |
||
| enter an account title to record billings | enter a debit amount | enter a credit amount |
| enter an account title to record billings | enter a debit amount | enter a credit amount |
|
(To record billings.) |
||
| enter an account title to record collections | enter a debit amount | enter a credit amount |
| enter an account title to record collections | enter a debit amount | enter a credit amount |
|
(To record collections.) |
||
| enter an account title to recognize revenue | enter a debit amount | enter a credit amount |
| enter an account title to recognize revenue | enter a debit amount | enter a credit amount |
| enter an account title to recognize revenue | enter a debit amount | enter a credit amount |
|
(To recognize revenue.) |
In: Accounting
Crane, Inc. began work on a $7,016,000 contract in 2020 to
construct an office building. During 2020, Crane, Inc. incurred
costs of $1,798,560, billed its customers for $1,125,000, and
collected $910,000. At December 31, 2020, the estimated additional
costs to complete the project total $3,197,440.
Prepare Crane’s 2020 journal entries using the
percentage-of-completion method. (Credit account titles
are automatically indented when amount is entered. Do not indent
manually. For costs incurred use account Materials, Cash, Payables.
If no entry is required, select "No entry" for the account titles
and enter 0 for the amounts.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record costs incurred |
enter a debit amount |
enter a credit amount |
|
enter an account title to record costs incurred |
enter a debit amount |
enter a credit amount |
|
(To record costs incurred.) |
||
|
enter an account title to record billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record billings |
enter a debit amount |
enter a credit amount |
|
(To record billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
In: Accounting
Stellar, Inc. began work on a $6,491,000 contract in 2020 to
construct an office building. During 2020, Stellar, Inc. incurred
costs of $1,941,020, billed its customers for $1,138,000, and
collected $904,000. At December 31, 2020, the estimated additional
costs to complete the project total $3,304,980.
Prepare Stellar’s 2020 journal entries using the
percentage-of-completion method. (Credit account titles
are automatically indented when amount is entered. Do not indent
manually. For costs incurred use account Materials, Cash, Payables.
If no entry is required, select "No entry" for the account titles
and enter 0 for the amounts.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record costs incurred |
enter a debit amount |
enter a credit amount |
|
enter an account title to record costs incurred |
enter a debit amount |
enter a credit amount |
|
(To record costs incurred.) |
||
|
enter an account title to record billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record billings |
enter a debit amount |
enter a credit amount |
|
(To record billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
In: Accounting
Which of the following does not contribute to the existence of monopoly power?
|
A continuously decreasing long-run average cost curve |
||
|
The possession of a patent |
||
|
The control of essential inputs in the production process |
||
|
A pure cost or quality advantage |
||
|
A relatively inelastic market demand curve |
10 points
QUESTION 2
Industry demand is given by P = 200 – 0.6Q. The long-run industry costs are such that: LAC = LMC = $40. Based on this information, the number of units bought/sold under pure monopoly in the long run is ____.
Hint: Write your answer to two decimal places.
10 points
QUESTION 3
Which of the following is true of a pure monopoly?
|
A pure monopoly can raise the market price indefinitely. |
||
|
A pure monopoly is typically more efficient than other firms in the market. |
||
|
A pure monopoly faces a horizontal demand curve. |
||
|
A pure monopoly restricts output below the competitive level. |
||
|
A pure monopoly produces at the level where price equals marginal cost. |
10 points
QUESTION 4
A monopolist produces and sells 300 units at a price of $38 per unit. The monopolist’s marginal cost is equal to $15 and average cost is equal to $26. The monopolist’s profit is:
10 points
QUESTION 5
Industry demand is given by P = 200 – 1Q. The long-run industry costs are such that: LAC = LMC = $40. Based on this information, the number of units bought/sold under perfect competition in the long run is ____.
Hint: Write your answer to two decimal places.
10 points
QUESTION 6
A market is considered a pure monopoly when:
|
all firms in the market sell homogeneous goods. |
||
|
there is a single buyer for the goods produced in the market. |
||
|
the firm produces a good that has imperfect substitutes. |
||
|
a single firm produces a good that has no close substitutes. |
||
|
there are low entry barriers in the market. |
10 points
QUESTION 7
Under patent protection, a firm has a monopoly in the production of a high-tech component. Market demand is estimated to be P = 100 – 0.4Q. The firm’s economic costs are given by AC = MC = $30 per component. The deadweight loss from the monopoly of this patent compared to the perfectly competitive outcome is ____.
Hint: Write your answer to two decimal places.
Hint two: Calculate the quantities/prices for the monopoly case and the pure competition case to solve.
10 points
QUESTION 8
Compared to a perfectly competitive industry, a monopolist will generally produce:
|
a greater level of output a lower price. |
||
|
a greater level of output at a higher price. |
||
|
a smaller level of output a lower price |
||
|
a smaller level of output at a higher price. |
||
|
roughly the same level of output but at a higher price. |
In: Economics
1.Which of the following is NOT associated with (or does not contribute to) business risk? Select one: a. Demand variability. b. The extent to which operating costs are fixed. c. Sales price variability d. Input price variability. e. The extent to which interest rates on the firm's debt fluctuate.
2"According to the trade-off capital structure theory, when the firm has a debt ratio that is higher than its optimal capital structure, the marginal gain from tax savings is lower than the marginal loss from financial distress and agency costs." True or false?
Select one:
a. False
b. True
In: Finance
The theories of absolute and comparative advantage
contribute to the explanation of the international trade process.
Bearing this in mind, below are some of the examples of products
through which the implementation of absolute and comparative
advantage in each individual india assigned to study, can be
implemented:
1) Cars
2) Petroleum
3) Computers
4) Pharmaceuticals
5) Gold
- Discuss the likelihood that india would enjoy an absolute
advantage, a comparative advantage, or no particular advantage of
each of the
products. (5x2=10
Marks)
- Conduct your own research to see whether india is trading any of the
above products with Oman. Provide details of what you find out.
Sources of reference should be cited to back up your research
findings.
In: Economics
Which of the following does not contribute to propagation of action potentials?
a) The refractory period allows the impulse to travel in only one direction.
b) Increasing the intensity of the stimulus increases the number of action potentials.
c) The magnitude of the action potential stays the same as it travels down the axon.
d) Each segment of the axon prevents the adjacent segments from firing.
e) As the area outside the membrane becomes negative, it attracts ions from adjacent regions; as the inside of the membrane becomes positive, it attracts negative ions from nearby in the cytoplasm. These events depolarize nearby regions of the axon membrane.
In: Biology