The Static Theory of Capital Structure suggests employing debt to the point that its cost equals the cost of the increased probability of bankruptcy
The expected near-100% debt mix for enterprises was predicted by Modigliani and Miller's work in a tax-based framework, but the actual borrowing mix of businesses is much lower than that. In reality, across a variety of organizations, the debt-to-equity ratio is typically closer to 50/50. Why wouldn't companies Capital Structure want to finance all of their debt via leverage? The answer is, in a word, bankruptcy. We find that if risk is taken into account in the model, the tax shield cannot fully benefit the equity holder. When a company adds debt to its financing mix, equity owners benefit from the interest tax shield, but they also assume the risk of the company's potential failure.
Learn more about Capital Structure here:
https://brainly.com/question/15041466
#SPJ4
the most important factor in producing a holistic view of the relevant adversary, neutral, and friendly systems within a larger system is describing the
Holistic view of systems is important to understand the relationships, interactions, dependencies and external factors like geography, resources, and political climate. It helps to inform decisions and risk management.
A holistic view of systems is essential for understanding the complex relationships, interactions, and dependencies that exist within a system, as well as the external factors that may impact it. By considering all aspects of the system and their interconnections, we can gain a better understanding of how the system functions as a whole and how different factors may impact its performance. This approach can be particularly valuable in decision making and risk management, as it can help identify potential vulnerabilities, areas of potential improvement, and opportunities for innovation. In short, a holistic view of systems provides a comprehensive and in-depth understanding of the system that can be used to inform decisions and manage risks.
To know more about holistic view click below:
https://brainly.com/question/13487743#
#SPJ4
Which one of these would not be a factor in determining the reorder point?
A) the EOQ
B) the lead time
C) the variability of demand
D) the demand or usage rate
E) all are factors
The correct answer to NOT a determining factor of reorder point is option A. the EOQ
The reorder point is independent of the EOQ. The inventory level at which a decision to reorder that specific stock of inventory is made is known as the reorder point (ROP). It is the minimum quantity of an item that a company has on hand; when stock falls below this quantity, a new order for the item is required. It is typically calculated as the anticipated usage during the lead period for replenishment plus safety stock. The EOQ (Economic Order Quantity) model made the assumption that there is no delay between placing an order and receiving the materials. When the amount of inventory becomes zero, the reorder point for stock replenishment occurs. Due to the immediate replenishment of stock, the level of inventory increases from zero to the original amount.
To learn more about reorder point click here
brainly.com/question/14597365
#SPJ4
Sharing information, collaborating, and coordinating resources to jointly manage a process is referred to as _______.
Sharing information, collaborating, and coordinating resources to jointly manage a process is referred to as process integration. Hence, the correct answer is process integration.
What does process integration mean?Process integration encompasses not only the design of new facilities but also retrofit design and the operation of existing systems. According to Nick Hallandale, process integration allows enterprises to make more money from their raw materials and capital assets while also being cleaner and more sustainable.
The major benefit of process integration is that it allows you to look at a system as a whole in order to enhance its design and/or operation. An analytical approach, on the other hand, would aim to enhance or optimize process units independently, without necessarily taking advantage of potential interactions between them.
To learn more about capital assets, click
https://brainly.com/question/22094873
#SPJ4
What are the three 3 common budgeting mistakes to avoid?
The most common budgeting errors to avoid are underestimating expenditures, missing to include all of your spending, being overly restrictive, and forgetting to include savings. Thankfully, they can all be avoided.
The secret to managing your money effectively so you can pay for expenditures, accumulate savings, and stay out of debt is to create a budget you can stick to.
However, despite the fact that a budget is fundamentally just a plan for how you'll spend your money, the word "budget" sometimes conjures images of self-deprivation or worrying about money. Designing a rigid budget with big goals—only to burn out after a month—is a common obstacle to good budgeting.
know more about budget here
https://brainly.com/question/15683430#
#SPJ4
John has been working at his job for three months. He is interested in showcasing his willingness to take on more responsibility. When a new project comes up for consideration, he should ______. a. let someone ask him to take on the new project b. avoid working on the new project c. ask to work on the new project d. encourage his best friend to work on the project Please select the best answer from the choices provided A B C D
John is interested in showcasing his willingness to take on more responsibility. When a new project comes up for consideration, he should ask to work on the new project.
A project is any individual or team activity, maybe incorporating research or design, that is deliberately planned to attain a certain aim. An alternate approach sees a project managerially as a sequence of events: a "collection of connected activities to be accomplished over a definite period and within particular financial and other limits".
A project may be part of a larger programme or serve as an ad hoc system. It should be noted that open-source software "projects" or musical "projects" by artists may lack specified team membership, detailed planning, and/or time-limited durations.
Hence the correct option is B
To know more about Project here-
https://brainly.com/question/29564005
#SPJ4
Britney pays head office rent of $12.000.0 for the next 12 months on 1st November 2050. The company's financial year runs from 1 January to 31 December. Which of the following is correct. ? Select One :
o $2,000.0 will be in SG&A, $10,000.0 will be in prepaid assets o $10,000.0 will be in SG&A, $2,000.0 will be in accrued expense o $2,000.0 will be in COGS, $10,000.0 will be in accrued expense o $10,000.0 will be in COGS, $2,000.0 will be in prepaid assets
The correct answer is $10,000.0 will be in prepaid assets, and $2,000.0 will be in accrued expenses.
In accounting, prepaid expenses are payments made in advance for goods or services that will be received or used in the future.
In this case, Britney pays head office rent of $12,000.0 for the next 12 months on 1st November 2050, so the rent payment would be recorded as a prepaid asset because it is for a future period, specifically for the next 12 months, and it will be expensed over time as the company uses the rented space. The portion of the rent corresponding to the current financial year, which runs from 1 January to 31 December, will be recorded as an accrued expense because it relates to a liability that has been incurred but not yet paid.
So, $10,000.0 will be in prepaid assets and $2,000.0 in accrued expenses.
To learn more about Prepaid Assets,
https://brainly.com/question/27961230
#SPJ4
Conduct thorough research on the following questions and provide a concise response:
(a) Why is teamwork important in business?
(b) How can employers help facilitate successful teamwork?
If bonds have been issued at a discount, then over the life of the bonds the
a. carrying value of the bonds will increase.
b. discount will increase.
c. interest expense will increase, if the discount is being amortized on a straight-line basis.
d. carrying value of the bonds will decrease.
If bonds have been issued at a discount, then over the life of the bonds the interest expense will increase, if the discount is being amortized on a straight-line basis.
Give a brief account on Straight-line amortization.In a process known as "straight-line amortization," interest is added to each payment in the same proportion until the debt is fully repaid. You can charge the cost of the intangible asset, calculate monthly loan repayment installments that include interest, and decide how much interest to pay for intangible assets using straight-line amortization. You divide the overall interest you owe on a loan by the number of periods. You calculate the projected salvage value of an intangible asset by deducting it from the book value, then dividing the result by the number of periods of the asset's useful life. Borrowers are guaranteed to pay interest at the beginning of the repayment period thanks to straight-line amortization. Gradually, the principal repayments decrease as the amount of interest expense in the subsequent instalments decreases. By increasing the percentage of each repayment, you can allocate more money to the principal.
Formula for straight-line amortization :
Intangible asset amortization = (book value - expected salvage value) / number of periods
To know more about, straight-line amortization, visit :
https://brainly.com/question/14142833
#SPJ1
when assessing a country’s economic market potential, examine all of the following except
O government laws
O consumption patterns
O population
O GDP
Economic indicators include measurements of macroeconomic stability and performance, such as gross domestic product (GDP), consumption, investment, and international trade (central government budgets, prices, the money supply, and the balance of payments). Hence, the correct option is (C) population.
Any nation's prosperity depends on economic development and growth. It is determined by how much a country has improved its production of goods and services while also raising its citizens' quality of life in comparison to earlier years.
Economic growth is the rise in the quantity of goods and services produced over an extended period of time by an economy, often a country.
It is expressed as a gain in the real gross domestic product (GDP), which is GDP that has been inflation-adjusted. GDP is the market value of all finished products and services generated in a nation or economy.
To know more about macroeconomic , click the below link
https://brainly.com/question/30044582
#SPJ4
What is one way that technology can improve the production of goods websites can allow consumers to purchase goods online?
Customers can buy products online using websites. Multiple items can be transported simultaneously using container ships. Automation makes it easier and more affordable to produce items.
A client is someone who makes a purchase from a seller, vendor, or supplier of goods, services, products, or ideas in exchange for cash or another beneficial consideration. Sales, business, and economics are all covered by this term. Regular, sustained commerce is made possible by customers who frequently transact with a seller. This allows the seller to develop statistical models to improve supply chains and production procedures. The Latin word "clientus," which meaning "to incline" or "to bend," is where the term "client" originates. It has something to do with the sentimental idea of closure. It is widely believed that regular changes are only made by people when they are motivated by fear or greed. Since gaining a client is such a rare occurrence, experts who can deal with particular difficulties are in high demand.
Learn more about Customers from
brainly.com/question/380037
#SPJ4
Technology can improve the production of goods in many ways, but one of the most common is through websites. Websites allow consumers to easily search for products, compare prices and features, and purchase goods online. They also enable companies to automate their order processing, keep track of inventory, and provide customer service. Additionally, websites can be used to advertise products, build brand awareness, and engage customers in marketing campaigns.
Hope This Helps You!
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50, 000, which includes the cost of the band, lighting, security, etc. How much profit will the concert promoters earn if they set the price of each ticket at $50?
A. $150, 000
B. $75,000
C. $25,000
D. $100, 000
Answer:
C
Explanation:
Profit = total revenue - total cost
If price is set at $50, both the die hard and casual fans would pay because the price is below or equal to their willingness to pay
willingness to pay is the highest amount a consumer is willing to pay for a product
(50 x 1500) - 50,000 = 25,000
Who is the group of people MOST likely to purchase a company's products?
O A.marketing mix
О в.target market
O C.primary audience
O D. advertising audience
Option B is correct.A target/goal market is a crew of customers with shared demographics who have been recognized as the most likely buyers of a company's product or service.
Why is goal market important?Having the right target market helps you decide where to find practicable purchasers who are looking for what you have to offer. If you have a target market, you know where to concentrate your advertising and marketing efforts and what to provide that is compelling and properly received.
For example, a children's toy may additionally have boys a while 9–11 as the target market and the boys' mother and father as the target audience. It may additionally also be defined as the consumer segment most likely to be influenced through an advertising campaign. The target market is also awesome from the buyer persona.
Learn more about target market here:
https://brainly.com/question/20974098#SPJ1Which of the following items should a company report directly in its monthly cash budget?
a. Accrued interest on zero coupon bonds that it issued.
b. New shares issued in a stock split.
c. Its monthly depreciation expense.
d. New shares issued in a stock dividend.
e. Cash proceeds from selling one of its divisions.
A company should report directly in its monthly cash budget any cash proceeds from selling one of its divisions. option E is the correct answer.
What is a cash budget?An estimate of a person's or a business's cash inputs and outputs over a certain time period is called a cash budget.
Cash budgets are typically used to determine whether a business has enough cash to support normal operations. It can also be used to assess how much money is being wasted on useless activities by a corporation.
A cash budget assists in preventing a cash crunch during times when a business faces a large volume of expenses.
It enables a business to decide how much credit it can provide to clients without experiencing liquidity issues.
Learn more about cash budgets here https://brainly.com/question/8707644
#SPJ1
If there are no units in process at the beginning of the period,
A) then the units started into production will equal the number of units transferred out.
B) the units to be accounted for will equal the units transferred out and the units in process at the end of the period.
C) only one computation of equivalent units of production will be necessary.
D) the company must be using a job order cost system.
A) then the units started into production will equal the number of units transferred out. If there are no units in process at the beginning of the period, then the units started into production will equal the number of units transferred out.
When no units are in progress at the start of a period, all units put into production during that period will have been finished and transferred out by the conclusion of that period. This is because there aren't any ongoing projects from earlier periods that were started during the current period. Additionally, this indicates that by the end of the period, there won't be any units in progress. It's also vital to keep in mind that just the precise scenario mentioned in the question applies to this; in other cases, the units put into production and those moved out might not be the same.
Learn more about production units here:
brainly.com/question/14772856
#SPJ4
a(n) ________ scholar explores communication with the ultimate goal of changing society.
a critical scholar explores communication with the ultimate goal of changing society. A collection of people engaged in constant social interaction is referred to as a society.
A society is a collection of people that regularly contact with one another or a significant social group that inhabits the same physical or social region and is generally under the control of the same political leadership and prevailing cultural norms. A given society may be defined as the sum of all of these interactions among its constituent members. Societies are characterized by patterns of relationships (social relations) between people who share a certain culture and institutions. In the social sciences, subgroup domination or stratification patterns frequently appear in bigger societies. By designating particular behaviors or ideas as acceptable or undesirable, societies create patterns of behavior.
learn more about society here:
https://brainly.com/question/13295832
#SPJ4
explain the major step of medical plant processing
Answer:
The primary herb processing steps include drying, size reduction, grinding and sieving. The secondary processing involves extraction with the aid of suitable solvents, concentration and drying.
Explanation:
Hope it helps thank you pa brainliest na rin
Understanding the structure of commercial banks and the services/products that they provide is essential for the successful leadership of any commercial enterprise. While fundamental knowledge of the industry as a whole is important, it is equally crucial to assess the risk profile of counter-parties to ensure that appropriate steps have been taken to mitigate this risk as much as possible.
To understand the risk associated with corporate banking activities more, prepare a written response to the following questions:
What is meant by off-balance sheet activity?
What specific types of off-balance-sheet items would you expect for commercial banks?
How does an off-balance-sheet item move onto the balance sheet?
How do you assess the risk of off-balance-sheet items?
Receiving deposits and disbursing loans are two of a commercial bank's main duties. Deposits might be time, current, or savings deposits.
What is commercial bank and its functions?A commercial bank is a type of financial organisation that manages all operations relating to public money deposits and withdrawals, lending money for investments, and other similar activities. These institutions are for-profit banks that operate solely for financial gain. Commercial banks include ICICI, State Bank of India, Axis, and HDFC. In addition to loans, credit cards, lines of credit, and other services, retail banking also offers checking and savings accounts to customers.
Business customers typically receive financing, underwriting, letters of credit, lines of credit, checking and savings accounts, and other services from commercial banks. Financial institutions that handle checking accounts, offer deposit acceptance, and make loans are referred to as commercial banks. Additionally, they give both people and small businesses access to fundamental financial products like savings accounts and certificates of deposit (CDs).
To learn more about commercial banks refer to :
https://brainly.com/question/1263347
#SPJ4
What is an example of an irregular or variable expense?
An example of an irregular or variable expense is home repairs. These can range from small fixes like changing a lightbulb to major repairs such as replacing the roof.
The cost of these repairs can vary depending on the type and extent of the repairs needed.
A cost that changes in accordance with a certain type of activity is called a variable expense. For instance, the cost of direct materials rises as sales do. Commissions, billable labour, piece rate labour, and credit card fees are examples of additional variable costs. Few costs in a firm are actually changeable.
To know more about expenses here
https://brainly.com/question/24224392
#SPJ4
In a new margin account, a customer sells short 1,000 shares of XYZ at $30 per share and deposits the required margin. If the stock subsequently falls to $25 per share, the equity in the account is A) $20,000. B) $15,000. C) $10,000. D) $25,000.
11000, Investors should treat the transactions inside a mixed-margin account as separate. For both purchase and short sell, the investor will require $6,000 and $5,000, respectively.
Which one of the foregoing will fulfil a $1,000 Reg T margin call?the $1,000 cash deposit or a $2,000 deposit of fully paid securities for margin. A customer may deposit $1,000 in cash or $2,000 in completely funded into among stocks that have a loan amount of $1,000) to satisfy a $1,000 initial margin call.
How is margin account calculated?If the stock subsequently falls to $25 per share, the customer can buy back the borrowed shares for a total cost of $25,000 (1,000 shares x $25 per share). The customer then returns the shares to the broker and keeps the difference between the sale price and the buy-back price as profit.
In this case, the difference between the sale price and the buy-back price is $5,000 ($30,000 - $25,000). So the equity in the account would be $5,000.
So the answer would be C) $10,000.
To know more about margin visit:
brainly.com/question/7781429
#SPJ4
A bank can get additional excess reserves by doing any of the following, except: Borrowing from other banks Buying Treasury securities from the Fed Receiving additional deposits Borrowing from the Fed
The Fed's reserves decrease as banks buy Treasury securities from it because they must cover the cost of the acquisitions. A bank is a type of financial organisation that is authorised to offer loans and receive deposits.
An institution that is permitted to provide loans and accept deposits for checking and savings accounts is a bank. Other services provided by banks include safe deposit boxes, currency exchange, and individual retirement accounts (IRAs). Among the many different types of banks are retail banks, commercial or corporate banks, and investment banks. In the USA, banks are governed by both federal and state laws. At least since the thirteenth century, banks have been around. Customers and company owners may deposit their cash in a secure area with them, and a business can obtain loans for both personal and professional purposes.
learn more about banks here:
https://brainly.com/question/14042269
#SPJ4
The adjustment for overapplied overhead ______ net income. Multiple choice question. increases both cost of goods sold and decreases both cost of goods sold and increases cost of goods sold and decreases decreases cost of goods sold and increases
The adjustment for overapplied overhead decreases cost of goods sold and increases net income.
Net income refers to the amount of money a company earns after all expenses and taxes have been subtracted from its total revenue. It is also known as "net profit" or "bottom line." This figure is used to measure a company's financial performance and is important for investors and analysts to consider when evaluating a company's overall health.
Overapplied overhead happens when costs caused are not as much as what an organization represents in its financial plan. This implies that an organization comes in under financial plan and accomplishes a lower measure of above costs during the bookkeeping time frame.
Know more about Overapplied overhead - https://brainly.com/question/26466781
#SPJ4
An investment adviser has its home office in State C. Their only business is with registered investment companies, large employee benefit plans, and broker-dealers. They have no place of business in State D, but provide investment advice to several registered investment companies in that state. State D has recently adopted the Uniform Securities Act and the Administrator feels that the IA should be required to register there. Under the USA
The firm does not have to register because they have no place of business in the state and their only clients in that state are registered investment companies.
An investment is the provision of funds to acquire an asset with the aim of increasing the value of the asset over time. Investment requires sacrificing current items such as time, money, and effort.
In finance, the purpose of investment is to obtain a profit from the invested capital. Returns consist of realized gains or losses on the sale of real estate or investments, unrealized capital appreciation or dividends, investment income such as interest or rental income, or a mixture of capital gains and income.
To know more about Investment here-
https://brainly.com/question/15105766
#SPJ4
Goals of data analysis Consider the following scenario. An economist uses historical stock prices of a company to forecast future stock prices and determine optimal equity trading strategies. This scenario most closely aligns with which of the following goals of data analysis? Quantifying relationships O Testing hypotheses Describing the economy Predicting the future
The goal of the data analysis in this scenario is to predict the future. The economist is using historical stock prices of the company to forecast future stock prices and determine optimal equity trading strategies.
This involves looking at the current market conditions and trends, analyzing the past performance of the stock, examining the historical performance of the company, and using statistical models to predict the future performance of the stock. By predicting the future stock price, the economist can develop trading strategies that will maximize return on investment. This is the primary goal of the data analysis in this scenario.
To know more about data analysis refer to the link brainly.com/question/13103333
#SPJ4
Define the marginal social benefit of pollution, and explain why polluting more can provide benefits to a firm even when it could produce the same quantity of output without polluting as much
The additional compensation to individuals from each additional unit of pollutant is known as even the marginal social good of pollution. A company may gain from increasing its pollution levels if, for instance, it must purchase and install pricey special equipment to extract Carbon dioxide in order to stop CO2 emissions.
What is the pollution's minimal social benefit?Recall that marginal societal benefit of contamination is the huge savings that an increased unit of pollutants results in for polluters. Accordingly, each plant will continue to emit pollution until its own marginal utility of pollution equals zero in the absence of government intervention.
What does marginal benefit mean?A marginal utility is the highest price a consumer will pay for an extra bonus service or product. It also refers to the additional pleasure or use that a customer experiences after purchasing the extra commodity or service.
To know more about marginal benefit visit:
https://brainly.com/question/22519664
#SPJ4
a work package represents one component of the product that the project aims to deliver.
a. true
b. false
False, a work package represents one component of the product that the project aims to deliver.
What is a Work package?
A work package is a breakdown of the larger project into smaller, manageable tasks. It typically includes a detailed description of the tasks to be completed, the resources required, and the timeline for completion. It can also include a budget, a risk assessment, and quality assurance requirements. Work packages help to ensure that all the necessary tasks are completed on time and within budget.
What is Budget?
A budget is an estimate of income and expenditure for a specific time period. It is a plan that helps individuals, organizations, and governments manage their finances in order to achieve specific financial goals. Budgets usually include categories for income, expenses, assets, liabilities, and savings. Budgeting is an important tool for helping individuals and organizations make informed decisions about their financial futures. It allows them to plan ahead and allocate resources appropriately. Budgeting also helps identify potential risks and opportunities, allowing organizations to make strategic decisions that promote their long-term success.
Therefore the option B. False.
To know more about Budget,
https://brainly.com/question/24940564
#SPJ4
In a marketing decision, constraints are most likely to be restrictions on the ________ needed to solve the problem.
Constraints in a marketing decision are most usually limitations on the time and money required to address the problem.
What is a marketing decision?A marketing decision support system (abbreviated MKDSS) is a marketing activity decision support system. The technology is meant to assist organizations in exploring various situations by modifying previously obtained data from prior events. It is made of information technology, marketing data, systems tools, and modeling skills that allow it to forecast the results of various scenarios and marketing initiatives. MKDSS aids decision-makers in many circumstances and may be a highly useful tool for a firm to gain a competitive advantage.
To learn more about marketing decisions, click
https://brainly.com/question/12309856
#SPJ4
The price elasticity of demand for a particular commodity depends upon all of the following except O A. the percentage of a consumer's total budget devoted to purchasing that commodity OB. the number of close substitutes for that commodity OC. the length of time allowed for price changes of that commodity OD. availability of complementary goods
Except for the availability of complementary commodities, all of the following factors affect the price elasticity of demand for a certain commodity.
The demand curve is the relationship between price and quantity demand. Demand for a product is affected by a number of factors, including perceived need, price, perceived quality, convenience, available alternatives, customer preferences, and financial resources. How much did the good cost? A good's potential price and the quantities that might be purchased at those prices form the fundamental relationship between supply and demand. A rise in price will typically result in a drop in the quantity demanded because the relationship is frequently antagonistic. This unfavorable link can be seen visually in the consumer demand curve's declining slope.
Learn more about Demand from
brainly.com/question/1245771
#SPJ4
Steven and Sally have income from all sources (taxable and nontaxable) totaling $139,506. Their taxable income is $114,706. Their tax liability is $16,815. Their average tax rate is % (rounded to the nearest whole number).
Their average tax rate is 15%. An income statement's final line item before the bottom line, or net income, is often the tax expense.
The ratio at which a company or individual is taxed is known as the tax rate, and it is typically stated as a percentage. Statutory, average, marginal, and effective tax rates are some of the ways that are used to display them. When applied to a tax base, the phrases inclusive and exclusive might be used to present these rates. The rate imposed by law is known as a statutory tax rate. A sales tax might have a flat statutory rate, whereas an income tax might have several statutory rates for various income levels. The statutory tax rate, which is calculated as a percentage, is always greater than the actual tax rate. If an individual's gross annual income exceeds Rs. 2,50,000 during a fiscal year, they are required to file an ITR. For older folks, this restriction is more than Rs.
Learn more about tax rate here
https://brainly.com/question/5022774
#SPJ4
Siobhan is interested in creating a fashion line from banana husks. She is attempting to explain to her bosses how this is an environmentally friendly option. Which fact would Siobhan MOST likely use to prove her point?
A.
Banana husks come from underdeveloped countries that do not require lots of regulations to produce.
B.
Banana husks have been proven to be much softer than other byproducts used to create cloth.
C.
Bananas are already grown for consumption so no extra energy or resources will be used to create the husks.
D.
Bananas are really popular among people, so this will generate interest in the fabric made from the husks.
Answer:
The correct answer is C. Bananas are already grown for consumption so no extra energy or resources will be used to create the husks.
Explanation:
Banana husks are residues that arise from the consumption of bananas by people, with which in principle they do not have a specific use, and are generated constantly given the high consumption rates of these foods.
Therefore, if the husks were to be used for the creation of changes of clothes, that is, using waste as raw material, this would be an environmentally friendly option because new resources would not be used for their elaboration, but rather they would be recycled. waste from other types of consumption.
A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost (and ATC) of mining diamonds is constant at $1,000 per diamond, and the demand for diamonds is described by the following schedule:
Table 2: Demand for Diamonds
Price Quantity
$8,000 5,000
7,000 6,000
6,000 7,000
5,000 8,000
4,000 9,000
3,000 10,000
2,000 11,000
1,000 12,000
(a) If there were many suppliers of diamonds, what would be the price and quantity?
(b) If there were only one supplier of diamonds, what would be the price and quantity?
(c) If Russia and South Africa formed a cartel, what would be the price and quantity? If the countries split the market evenly, what would be South Africa's production and profit? What would happen to South Africa's profit if it increased its production by 1,000 while Russia stuck to the cartel agreement?
(d) Use your answers to part (c) to explain why cartel agreements are often not successful.
(a) the market would reach equilibrium at a price of $3,000 and a quantity of 10,000 the intersection of the demand, marginal cost curves, where quantity supplied equals the quantity demanded.
(b) If there were only one supplier of diamonds, what would be the price and quantity?(b) If there were only one supplier of diamonds, the supplier would have a monopoly and would set the price at the profit-maximizing level, which is the price where marginal revenue equals marginal cost. In this case, that would be $3,000 per diamond, as at this price, the quantity demanded would equal the quantity supplied. The quantity would be 10,000.
What would happen to South Africa's profit if it increased its production by 1,000 while Russia stuck to the cartel agreement?(c) If Russia and South Africa formed a cartel, they would collude to set a higher price, such as $6,000, in order to increase their profits. The quantity would decrease to 7,000. If the countries split the market evenly, South Africa would produce and sell 3,500 diamonds, earning a profit of $3,500,000 (3,500 x $1,000). If South Africa increases its production by 1,000 while Russia sticks to the cartel agreement, South Africa's profit would decrease to $2,000,000 (2,500 x $1,000) as it would have to sell the additional diamonds at the cartel price, earning only $6,000 per diamond instead of $1,000.
Use your answers to part (c) to explain why cartel agreements are often not successful.(d) Cartel agreements are often not successful because members have incentives to cheat on the agreement by increasing production to capture a larger share of the market. This can lead to a decrease in the overall price and profits for all members, as seen in the example above with South Africa increasing production. Additionally, new entrants may enter the market, breaking the cartel's control over the market. Furthermore, governments often intervene to prevent the formation of cartels or to break them up, as they can lead to higher prices for consumers and can restrict competition in the market.
Learn more about Market here:
brainly.com/question/17284274
#SPJ4