1.5) You use RM50,000 of your own money to start an espresso stand. During the first year you earn a 10% return on that investment. If the current interest rate on savings is 8%, you earn an economic profit of Working Calculation:
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A: production function, in economics, is a condition that communicates the connection between the…
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A: Accounting profit is a company's net income, which is revenue minus expenses. Economic profit is…
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A: If a firm more than doubles its output by double all of its inputs, the firm is in increasing…
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A: "Since you have asked multiple questions, we will solve the first one for you. If you want any…
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A: A firm can compute its accounting and economic profit by using the implicit and explicit cost. It…
Q: Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a…
A: Total revenue is the total receipts collected from the sale of goods or service in the market.…
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A: Firms earn revenue with the help of the sale of the products that it produces. On the other hand, it…
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A: Fixed cost = 69 euro Variable cost = 0.20 euro/plant sales price = 0.50 euro/plant
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A: Profit is the difference between total revenue and total cost. Total revenue is calculated by…
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A: Implicit cost is the opportunity cost.
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A: Accounting profit is the net income for a company, which is revenue minus expenses. Economic profit…
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A: Let’s assume that the money needed to invest is $100.Rate of return is 6%.Now, suppose the borrowing…
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A: Accounting profits are the profits made by the firm by producing and selling products. It is the…
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A: Profit is the difference between Total cost a nd total revenue . And in this case the marginal…
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A: Initial earning of Sid=80,000 Revenue= $240,000 Value of saving bonds= $70,000 Interest rate= 6%…
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A: Here we calculate the Implicit cost , Explicit cost and Accounting profit , Economic Profit by using…
Q: Explain the difference between accounting and economic profit. Give two examples of when they…
A: Accounting profit means that profit which is earned after the explicit costs are deducted from…
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A: There are two types of profit: Economic Profit Accounting Profit The economic profit can be…
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A: Marginal product of an input refers to the change in the total output caused by the additional…
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A: Given: A cafeteria sells pastries to its customers sells them at = P60 per dozen The semi-annual…
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A: GIVEN A breeder tells you he has determined for each 1-1b increase in weaning weight profit…
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A: Given : Total Revenue for his Law Business ($) = $240,000
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A: a) Accounting profit: The difference between Total revenues and explicit costs involved. Total…
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A: Accounting profit does not take into account the opportunity cost. Accounting Profit = Total Revenue…
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A: Explicit costs are the expenditures incurred by an individual or a business out of its own pockets.…
Q: 4. Consider the table below which shows the total fixed costs (TFC) and variable costs (TVC) for…
A: The average cost can be calculated by dividing the total cost by the level of output. Marginal cost…
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A: Profit = TR - TC Profit = (P x Q) - TC let t = number of months
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A:
Q: 3. Mr. Willy is determined to raise his revenue of selling blankets in the market. He is…
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A: Profit is the percentage by which a company's earnings exceed its costs for a specified period of…
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Q: Q9: Given the Average revenue AR = 60 – 3Q a) Find the marginal revenue function. b) Compare between…
A: Here, average revenue curve is given as: AR= 60-3Q According to the AR function, total revenue…
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A: The firm would result in the production of the various goods and services using the various inputs.…
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A: The term “profit” is defined as the excess of total revenue over the total cost. Marginal profit is…
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A:
Q: 5. Given that P(x) is the profit function when x items are sold, the approximate additional profit…
A: Given the profit function = P(x) Additional profit or marginal profit = ?
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A: Given: C(x) =cost function C'(100) = $3.50 per box
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A: The accounting profit will be? Explanation : Add all the costs of her business which include office…
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A: The economic profit accounts for the implicit and explicit costs that are incurred by the individual…
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A: Economic value added, often abbreviated as economic profit, is a way of quantifying the…
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- How is intellectual property different from other property?W7 Q5 A paper published in the Harvard Business Review points out a new way to calculate economic profit that could be more appropriate for service firms and other people-intensive companies. Instead of focusing on investment and return on investment, the focus is on employee productivity, in terms of both generating revenues and reducing costs. The approach is to first determine economic profit in the conventional way, except that we ignore taxes, so that economic profit is before tax, as follows: Economic profit = Operating profit − Capital charge Assume the following information for a hotel chain that wishes to adopt the new method. The firm has $100 million in operating profit, has $1 billion in investment, and uses a cost of capital rate of 5%, so the capital charge is $50 million and the economic profit is $50 million. Relevant calculations are contained in Part 1 of the following schedule: Part 1: Economic Profit (in thousands, except cost of capital rate) Revenue…Semi-Salt Industries began its operation in 1975 and remains the only firm in the world that produces and sells commercial-grade polyglutamate. While virtually anyone with a degree in college chemistry could replicate the firm’s formula, due to the relatively high cost, Semi-Salt has decided not to apply for a patent. Despite the absence of patent protection, Semi-Salt has averaged accounting profits of 5.5 percent on investment since it began producing polyglutamate—a rate comparable to the average rate of interest that large banks paid on deposits over this period. Do you think Semi-Salt is earning monopoly profits? Why?
- The timber rights to a tract of forest can be purchased for $250,000. The harvesting agreement would allow 25% of the timber to be cut in each of the first, second, fourth, and fifth years. The purchaser of the timber rights would be required to replant, at its expense, the logged areas in Years 3 and 6. Arrowsmith Lumber calculates that its profit in each of the four cutting years would be $90,000 and that the cost of replanting the harvested areas in each of Years 3 and 6 would be $30,000.a) Should Arrowsmith Lumber buy the timber rights if its cost of capital is 5.5%?b) By what amount would the economic value of Arrowsmith Lumber be increased or decreased if it proceeded with purchasing the timber rights for $250,000?Acme Drug Co. has a patent on the drug A-rene, the annual demand for which can be described by the demand curve: Q = 4500 - 300P. Production of the drug requires an annual fixed cost of $3,000 and a per unit marginal cost of $5. (i) How many units of the drug will Acme produce each year, and what price will it charge, in order to maximize its profits? What will be its annual profits? (ii) Now suppose that the Better Drug Co. has discovered B-rene, a new drug which seems to be identical to A-rene in all its effects. If Better enters the market, competition with Acme will conform to a Cournot duopoly. Better’s costs are identical to those of Acme. What would be the equilibrium outcome of this duopoly? Specifically, how much would each firm produce and what would be the price? How much profit would each firm make? Would Better find it profitable to enter the market? (iii) Would it be in the interests of society as a whole for Better Drug to enter into production? Identify the gainers and…The marginal revenue of socks given as MR = 100-2Q The marginal Cost Of socks is given as MC = 5078Q. How many socks will be produced to maximize profit а 0 b. 5 C.50 de 100
- Complete the following table by calculating the contribution to profit and overhead for each of the 10 time periods and prices. Time Period Price Quantity Sold Total Contribution ($) (Million) ($ Million) 1 2,400 0.2 2 2,200 0.2 3 2,000 0.2 4 1,800 0.2 5 1,700 0.2 6 1,600 0.2 7 1,500 0.2 8 1,400 0.2 9 1,300 0.2 10 1,200 0.2 Over the 10 periods, the total contribution to profits and fixed costs from price skimming is million.Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. Zero economic profit implies zero accounting profit.Given , AR = 60- 3Q ,i. Plot the average-revenue curve, and then find MR curve.ii. Find the total-revenue function and the marginal-revenue function mathematically fromthe given AR function.iii. Comparing the AR and MR functions, what can you conclude about their slopes?
- You quit your job as an analyst making $50,000. You then take your $500,000 in savings and open a Mighty Taco restaurant. You work roughly the same hours as before and make $60,000 per year from the restaurant. Assume the interest rate on government treasury notes is 5%. Calculate the economic profit or loss from your move in year 1. (Include a negative sign if it’s a loss)Enter as a value.A 62 metre length of rope is cut into pieces whose lengths are in arithmetic progressionwitha common difference of d metres. Given that the lengths of the shortest and thelongest pieces are 0.5 and 3.5 metres respectively, find d.(C) For a firm’s product, the demand function isp = 72 2 0.04qand the average cost function isc¯ =500q+ 30 At what level of output would profit be maximized?5d What is the relationship between accounting profit and economic profit? Which is relevant for a firm’s decision to continue production and why? Give examples as to what may cause a divergence between accounting and economic profit
