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8- A business is below the economic break-even point and above the operational break-even point. Therefore, it can be said that: *
a) gives operating and economic profit
b) gives economic
c) gives operating profit and economic loss
d) causes economic and operational loss
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Solved in 2 steps
- Management believes it can sell a new product for $8.50. The fixed costs of production are estimated to be $6,000, and the variable costs are $3.20 a unit. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Loss) 0 500 1,000 1,500 2,000 2,500 3,000 Determine the break-even level using the above table and use the following Equation to confirm the break-even level of output. PQB = FC + VQB PQB - VQB = FC QB (P-V) = FC QB = FC P-V What would happen to the total revenue schedule, the total cost schedule, and the break-even level of output if management determined that fixed costs would…10. If a firm is choosing to operate that means they have a a. positive accounting profit b. Positive or 0 economic profit c. Positive total revenue d. None of the aboveACME Coal paid $5,000 to lease a railcar from the Reading Railroad. Under the terms of the lease, $1,000 of this payment is refundable if the railcar is returned within two days of signing the lease. 1. Upon signing the lease and paying $5,000, how large are ACME’s fixed costs? Its sunk costs? 2. One day after signing the lease, ACME realizes that it has no use for the railcar. A farmer has a bumper crop of corn and has offered to sublease the railcar from ACME at a price of $4,500. Should ACME accept the farmer’s offer?
- 14-If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero Group of answer choices variable costs fixed costs opportunity costs total cost1] TEXplor has purchased a 2-year lease on land adjacent to the land leased byClampett. The land leased by TEXplor lies above the same crude oil deposit. Assume each company sinks wells of the same size at the same time. If both companies sinkwide wells, each will extract 2 million barrels in 6 months, but each company willreceive profit of only GHC 1 million. On the other if each company sinks a narrowwell, it will take a year for Clampett and TEXplor to extract their respective shares,but their profits will be GHC14 million apiece. Finally, if one company drills a widewell while the other company drills a narrow well, the first company will extract 3million barrels and the second company will extract only 1 million barrels. In thiscase, the first company will earn profits of GHC 16 million and the second companywill actually lose GHC 1million.1. Illustrate this using a normal form game. 2. Does either firm have a strictly dominant strategy? If yes, what is (are) thesestrategies?…26) Which of the following is a fixed cost for a chocolate factory over the course of a month? A) Depreciation of machines due simply to their age B) Overtime pay C) The cost of cocoa D) The cost of electricity (paid quarterly) for running the mixing machines
- Question 2 TEXplor has purchased a 2-year lease on land adjacent to the land leased byClampett. The land leased by TEXplor lies above the same crude oil deposit. Assume each company sinks wells of the same size at the same time. If both companies sinkwide wells, each will extract 2 million barrels in 6 months, but each company willreceive profit of only GHC 1 million. On the other if each company sinks a narrowwell, it will take a year for Clampett and TEXplor to extract their respective shares,but their profits will be GHC14 million apiece. Finally, if one company drills a widewell while the other company drills a narrow well, the first company will extract 3million barrels and the second company will extract only 1 million barrels. In thiscase, the first company will earn profits of GHC 16 million and the second companywill actually lose GHC 1million.1. Illustrate this using a normal form game. 2. Does this game have a Nash equilibrium? Explain your answer 3. Is collusion possible in…Question One TEXplor has purchased a 2-year lease on land adjacent to the land leased by Clampett. The land leased by TEXplor lies above the same crude oil deposit. Assume each company sinks wells of the same size at the same time. If both companies sink wide wells, each will extract 2 million barrels in 6 months, but each company will receive profit of only $ 1 million. On the other if each company sinks a narrow well, it will take a year for Clampett and TEXplor to extract their respective shares, but their profits will be $14 million apiece. Finally, if one company drills a wide well while the other company drills a narrow well, the first company will extract 3 million barrels and the second company will extract only 1 million barrels. In this case, the first company will earn profits of $ 16 million and the second company will actually lose $ 1 million. 1. Illustrate this using a normal form game. 2. Does either firm have a strictly dominant strategy? If yes, what is (are)…Question One TEXplor has purchased a 2-year lease on land adjacent to the land leased by Clampett. The land leased by TEXplor lies above the same crude oil deposit. Assume each company sinks wells of the same size at the same time. If both companies sink wide wells, each will extract 2 million barrels in 6 months, but each company will receive profit of only $ 1 million. On the other if each company sinks a narrow well, it will take a year for Clampett and TEXplor to extract their respective shares, but their profits will be $14 million apiece. Finally, if one company drills a wide well while the other company drills a narrow well, the first company will extract 3 million barrels and the second company will extract only 1 million barrels. In this case, the first company will earn profits of $ 16 million and the second company will actually lose $ 1 million. 4. Does this game have a Nash equilibrium? Explain your answer 5. Is collusion possible in this game? Explain your answer.
- 15- ____________ refers to the additional revenue gained from selling one more unit. Group of answer choices Total revenue Marginal revenue Economic profit Accounting profitYou own a business that sells coffee beans and coffee gift packs. You have the following information that relates to a special order for the next week of your trading: The following is relevant for the special order next week: -You have a goal to make $528 profit on coffee beans -You have a goal to make $1,595 profit on coffee gift packs Key financial data includes: Coffee gift packs per unit: Selling price = $44 Variable cost = $22 Coffee beans per unit: Selling price = $5.50 Variable cost = $2.20 Total fixed costs = $2,376 Required: 1) If 150 units of coffee beans were included in the special order, how many coffee gift packs would need to be sold in the special order to earn your desired total profit 2) Do a profit calculation to support your answer and show the total profit from the special order accounting for all costs. Show all workingsA project currently generates sales of $10 million, variable costs equal to 40% of sales, and fixed costs of $2.3 million. The firm's tax rate is 20%. The project will last for 10 years. The discount rate is 13%. How much can fixed costs increase before accounting profits turn negative? Express your answer in millions rounded to 2 decimal places
