The following statement- a wage rising slower than the rate of inflation is actually falling is True.
A wage is a payment given to the employee for doing the assigned task in the company for a specific period of time. Wages are fixed on an hourly basis. The increase in the prices of services and goods in an economy is called inflation. Inflation gives the rate of increase of prices over a specific period of time. When wage growth rises, inflation also rises. When wage growth falls, inflation also falls.
Wage growth plays a key role in inflation. When companies pay their employees more wages, then the cost of goods and services rises causing inflation. The purchasing power of goods and services falls down when wages are rising slower than the rate of inflation. Hence, we can say that A wage rising slower than the rate of inflation is actually falling.
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when a startup's promotional strategy is to place the product with retailers, trade shows, and other venues for the customer to experience, this is called a:
when a startup's promotional strategy is to place the product with retailers, trade shows, and other venues for the customer to experience, this is called a Push Strategy.
A push promotional technique is a form of marketing in which businesses bring their goods directly to customers. With the help of trade exhibits and point-of-purchase displays, this technique aims to put the product in front of consumers directly.
A push approach aims to sell to customers directly, eschewing conventional means of distribution. Direct sales of travel or insurance are two examples of this. Consumer promotions and advertising are the most likely promotional tools with this kind of strategy.
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fx services granted 15 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. the common shares have a market price of $8 per share on the grant date. ignoring taxes, what is the effect on earnings in the year after the shares are granted to executives?
The term "share" refers to the portion of the company owned by the individual who purchased the share.It's a way to get money for the business when it needs it.
The total cost of restricted share compensation is equal to the fair value of each share divided by the number of shares given to executives, which is equal to $15 million, or $8 per share.
The total cost of $120 million in compensation will be deducted equally over the three vesting years. This will have a negative impact on earnings, resulting in a 40 million dollar annual loss ($120 million divided by three years).
What are shares, exactly?A corporation's equity ownership is represented by shares. Shares are a form of financial asset for some businesses that guarantee an equal distribution of any declared residual profits in the form of dividends. Investors of a stock that delivers no profits don't partake in that frame of mind of benefits.
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the source of hyperinflations is primarily group of answer choices lower output growth. continuing declines in velocity. increases in money-supply growth. continuing increases in money demand.
Hyperinflation is caused primarily by a mix of slower output growth and (c) increases in money-supply growth
In industrialized countries, hyperinflation, defined as a succession of rapid, excessive, and unmanageable price increases, is uncommon. That's because actual hyperinflation, according to most economists, necessitates a high inflationary rate of 50% per month or 1,000% or more per year.
A 2% annual inflation rate is "most consistent with the Federal Reserve's mandate for maximum employment and price stability," according to the Federal Reserve System of the United States (FRS).
Hyperinflation is distinct. Inflation on steroids is what hyperinflation is. In the event of hyperinflation, a $1 item today could cost $10 or $50 in a year. According to Anders Slund of the Peterson Institute for International Economics, hyperinflation occurs only in very specific situations, such as currency breakdown, war, fiscal authorities losing control, or "wild populism."
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when a perpetual system is used and transportation cost is incurred to obtain inventory, the transportation cost is: a. added to inventory. b. deducted from the cost of goods sold when determining gross profit. c. reported as a contra-account that is subtracted from sales revenue when determining net sales. d. reported as selling, general
When a perpetual system is used and transportation costs are incurred to obtain inventory, the transportation costs are added to inventory.
Transportation (in British English) or transportation (in American English) is the movement of people, animals, and products from one location to another. Air, land (train and road), water, cable, pipeline, and space travel are all modes of transportation. The field is separated into infrastructure, vehicles, and operations. Transport facilitates human trade, which is critical for the advancement of civilizations.
Transport infrastructure includes both fixed installations such as roads, trains, airways, waterways, canals, and pipelines and terminals such as airports, railway stations, bus stations, warehouses, trucking terminals, refueling depots, and seaports. Terminals can be used for both passenger and cargo interchange and maintenance. Transport means any of the several modes of transportation used to transport people or freight.
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tom's textiles shipped the wrong material to a customer, who refused to accept the order. upon receipt of the material, tom's would credit accounts receivable and debit:
A sales return is when a consumer actually returns inventory of goods for whatever reason.
The sales return account is a contra-sales account and is subtracted from the sales value to get net sales because it is a debit account. Since Tom’s Textiles tracked the sales, the return will be categorized as a sales return.The following entry was made in the journal for returned materials:Since the receipt of returned goods is documented, sales return A/C Dr To Account Receivable A/C.In order to accurately report the returned item, we simply debited the sales return account and credited the account receivable account.
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the liability of foreignness is the inherent disadvantage that foreign firms experience in host countries because of their non-native status. such liability is manifested in which two basic dimensions? group of answer choices numerous differences in formal
In the field of international business, the term "liability of foreignness" (LOF) is well-known. Hymer first defined it as "costs of doing business abroad" in 1960 and 1976.
At the center of LOF is the knowledge that organizations face social and monetary expenses when they work in unfamiliar business sectors.
There are at least two ways in which such a liability can be seen:
First: The formal and informal institutions that set the game's rules vary greatly from country to country. Foreign businesses must expend resources to learn these rules, whereas local businesses are already well-versed in them.
Second: In spite of the fact that globalization has supposedly made customers less likely to discriminate against foreign businesses, foreign businesses are frequently still subject to discrimination. Informally and occasionally formally.
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coral company has the following financial statement information: current assets $30,000; noncurrent assets $70,000; current liabilities $20,000; noncurrent liabilities $40,000; and stockholders' equity $40,000. what is the debt to equity ratio?
The debt-to-equity ratio is 1.50. The debt-to-equity ratio, also known as the D/E ratio, is a measurement of a company's ability to pay off its debt.
What is the debt-to-equity ratio?A company's objective may not always be to have the lowest ratio. According to Lemieux, a relatively low debt-to-equity ratio may indicate that a business is financially strong and has grown significantly over time.However, it may also be an indication of inefficient resource allocation. No doubt, the level of risk that shareholders can bear must be respected, but Lemieux speculates that a very low ratio may be an indication of overly cautious management that fails to take advantage of growth prospects.The minority owners of publicly traded corporations frequently criticize the board of directors because their overly cautious management delivers them too poor returns, he adds.The debt-to-equity ratio, also known as the D/E ratio, is a measurement of a company's ability to pay off its debt. It is calculated by subtracting the total debt from the total shareholders' equity of a company.(20,000 + 40,000) / 40,000 = 1.5
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ariffs on some products no longer serve their original purpose of protecting domestic producers but they are still levied by the government. what are these types of tariffs called?
Tariffs implemented to protect a domestic industry are known as protective tariffs. They intend to make imported items more expensive than identical domestically produced goods.
Hence increasing sales of domestically made goods and boosting local business. A tariff might be particular, ad valorem, or compound (a combination of the two). A specific duty is a tax levied on a certain amount of money per unit of import, such as $1 per yard or pound. Ad valorem duties, on the other hand, are calculated as a percentage of the import's value. Tariffs harm consumers by raising the cost of imported goods.
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andrew is choosing between four loans. loan p has a nominal rate of 10.393%, compounded daily. loan q has a nominal rate of 10.516%, compounded weekly. loan r has a nominal rate of 10.676%, compounded monthly. loan s has a nominal rate of 10.755%, compounded annually. which loan will give andrew the best effective interest rate?
Andrew will choose loan s - which have a nominal rate of 10.755%, compounded annually.
What is a loan?The term loan refers to a type of credit instrument in which an amount of money is lent to another party in exchange for future repayments of value or principal. Lenders often add interest or financing costs to the principal, which the borrower must repay in addition to the principal balance.A loan is a provision of money to another party in exchange for repayment of the loan amount plus interest.A lender considers a potential borrower's income, creditworthiness, and debt level before deciding to provide a loan.Loans may be secured by collateral, such as a mortgage, or unsecured, such as a credit card, gold, and property. A revolving loan or line can be issued, repaid, and reissued, while a term loan is a fixed interest rate loan with a fixed interest rate.loans are available as a one-time amount specified or as a permanent line of credit up to a specified limit. Loans come in many forms, such as: secured loans, unsecured loans, commercial loans, and personal loans.to know more about loan treatment refer to:
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a company has $23,000 in cash and cash equivalents, $81,000 in short-term investments, $120,000 in net current receivables, $55,000 in inventory, $10,000 of prepaid insurance and $5,000 of supplies. the total current liabilities of the firm are $298,000. the quick ratio of the company is:
The total current liabilities of the firm are $298,000. the quick ratio of the company is 0.76
What is the Quick ratio?The quick ratio gauges a company's short-term liquidity position and quantifies its liabilities to pay short-term obligations with its most liquid assets.It is also known as the acid test ratio because it shows whether a company has the ability to immediately pay off current liabilities with its near-cash assets (assets that can be quickly converted to cash). A quick test intended to yield immediate results is known by the slang term "acid test."The quick ratio is viewed as a more restrained metric than the current ratio, which counts all current assets as coverage for current liabilities.By dividing a company's most liquid assets, such as cash, cash equivalents, marketable securities, and accounts receivable, by its total current liabilities, one can determine the quick ratio.Excluded from this list are certain current assets like prepaids and inventory because they might not be as easily convertible to cash or might need significant discounts to be liquidated.A company's liquidity and financial health are better indicated by a higher ratio result; conversely, a lower ratio indicates a greater likelihood that the company will have difficulty making debt payments.cash & cash equivalents 24000
short term investments 83000
net current receivables 123000
total current assets 230000
Quick ratio = 230,000/302000
Quick ratio = 0.761589
Hence, the quick ratio is 0.76.
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solutions inc. signs a 10-year lease for a building owned by property inc. that is appropriately classified as an operating lease by both the lessee and lessor. lease payments are $150,000 per year. the building has an estimated useful life of 30 years with no salvage value. assuming that the building has a fair value of $2,000,000 at the commencement of the lease, what amounts would property inc. recognize in its income statement (ignoring taxes) for the year ended december 31? assume that property inc. is using the straight-line method to depreciate buildings.
Cost of the lease: 150,000
The term "lessee" refers to the individual who is entitled to use the leased property.A lessor, who owns the asset, gives property or equipment to a lessee.The lessor must be reimbursed for the lease amount by the lessee.
Over the course of ten years, the real estate broker's fee ought to be capitalized and amortized equally.
Who is known as a lessee?
A person who rents land or other property from a lessor is called a lessee.The lessee, who is also referred to as the "tenant," is responsible for adhering to specific legal and contractual obligations.The lessee may face eviction if they break the terms of the lease, which is a legally binding document.
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which statement about marketing channels is true? multiple choice question. reaching the right audience through marketing channels is becoming easier. the number of available imc channels is shrinking as marketers switch to new media. new media channel options are overall better and more effective than traditional marketing channels. imc combines the channels so that together they exceed the total of the individual channels.
The true statement about marketing channels is that IMC combines the channels so that together they exceed the total of the individual channels. The Option D is correct.
What is the meaning of marketing channel?This refers to the set of people, organizations, and activities that work together to transfer goods from the point of origin to the point of consumption. The main purpose of the marketing channel is to create a direct or indirect connection between the organization that creates a product or service and prospective customers who may want to purchase it.
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reorganizing may occur to group of answer choices overcome existing deficiencies. recentralize authority. implement changes while at the same time providing a period of adjustment. all answer choices are correct address technological changes that impact current workflow.
Introduction of technology in the workplace results in saving time, smoothing and easy running of complex projects, and getting real-time feedback from customers with no time.
Technology and networking have impacted the current workflow in both ways; positively and negatively. After post covid period, most companies started giving flexibility for employees to work from home, and transform entire business processes end to end, most of the work is done paperlessly (adjusted well), from recruitment to marketing, and digital and technology have transformed/ changed their way of conducting and increase the productivity of each department.
However, this also invited hidden hackers and the vulnerability of losing any confidential information in the technological world. Nevertheless, technology has increased the effectiveness of workflow.
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a price skimming strategy often attracts consumers who are . select one: a. the early majority b. price sensitive c. early adopters d. the late majority e. laggards
A price skimming strategy often attracts consumers who are early adopters.
What is Price Skimming?
Price skimming is a method of product pricing in which a company sets its starting price as high as its target market would bear before gradually lowering it. The company reduces the price to appeal to a different, more price-sensitive portion of the population as the demand of the initial clients is met and competition enters the market.
When a new kind of product enters the market, price skimming is frequently employed. The objective is to make as much money as you can while customer demand is high and there isn't much competition in the market.
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independent of your answer in part (c), what procedures should the auditor perform if the difference between the expectation and the book value is greater than tolerable misstatement?
If the differ-ence between the auditor's expect-ation and the book value is gre-ater than the tolerable misstatement, the auditor should cons-ider performing the follow-ing audit procedures:
-Review the gen-eral journal and general ledger for any un-usual entries.
-Re-evaluate the his-torical return rates.
-Re-evaluate the gross profit mar-gin.
-Ask the client to ad-just the bo-oks.
What Is an Auditor?An auditor is a per-son authorized to review and verify the accu-racy of financial records and en-sure that comp-anies comply with tax laws. They pro-tect businesses from fraud, point out discrepancies in account-ing methods and, on occa-sion, work on a consult-ancy basis, helping organ-izations to spot ways to boost opera-tional efficiency.
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Pooja, Cathy, Huzefa, and Angela have come together to form a group based on their common interest of dining at new restaurants and writing about them in their blog. What kind of a group is this?
Pooja, Cathy, Huzefa, and Angela have come together to form a(n) ______ group.
Pooja, Cathy, Huzefa, and Angela have come together to form a(n) common interest group.
What is group?The term group refers to the two or more people are the involved on the particular activity. A group is an involved of the person are the based on the informal group. It was the people are to enjoy the person to the another person company.
The definition of a “interest group” is members of the group are chosen based on their interests. There was the interset are the common on the work to the new restaurants and also the blog writing.
As a result, the Pooja, Cathy, Huzefa, and Angela have come together to form a(n) common interest group.
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jake is another investor who currently owns shares of esolver stock. he would like to place a particular kind of limit order, in which the order is canceled if it cannot be executed immediately at the specified price or better. this type of order is known as
Jake is another investor who currently owns settlement stock. he wants to place a specific type of limit order, where the order is canceled if it cannot be filled immediately at the specified price or better. This type of order is known as good-till-canceled order.
A Good-Till-Canceled (GTC) order is an order to buy or sell a stock that lasts until the order is completed or cancelled. Brokerage firms often limit the time an investor can open a GTC order. This timeframe can vary between brokers.
Daily orders will remain active during the current day and automatically canceled at the end of the day if they have not been filled. Otherwise, the GTC command remains in effect until it is executed or deleted.
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An arbitration case dealing with a dispute between a customer and a member firm in the amount of $72,000 will be heard byA)one arbitrator, unless FINRA determines three is more appropriate.B)three arbitrators, the majority of whom must be public.C)three arbitrators, all of whom must be public.D)one arbitrator, unless both parties agree to three.
Option D. An arbitration case dealing with a dispute between a customer and a member firm in the amount of $72,000 will be heard by one arbitrator, unless both parties agree to three.
What is meant by arbitration?By agreement of the parties, a dispute is presented to one or more arbitrators through the arbitration process, who then render an official ruling on the matter. Instead of going to court, the parties choose arbitration as a private conflict settlement process.
a procedure wherein a neutral third party renders an official judgment that resolves a legal dispute without the need for a trial: In commercial disputes, arbitration is frequently favoured by businesses. Arbitration that is required or binds.
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a convenient means for assessing the importance of industrial design to a particular product is to characterize importance along cost and quality dimensions?
Along with cost and quality ergonomics, aesthetics are also important.
A good design process entails creating outstanding designs while taking into account human aspects and the look of the product while developing. This is known as "design for ergonomics and aesthetics." To create effective goods, it combines all the components of ergonomics and aesthetics, such as comfort and visual appeal. Today, many designers in the design sector use design for ergonomics and aesthetics to create products that are aesthetically pleasing and satisfy consumer expectations. In order to create high-quality designs, design for ergonomics and aesthetics strikes a balance between several factors, including durability, ecological, aesthetics, safety, and ergonomics.
The scientific field of ergonomics studies social interactions and how they affect various system components. It discusses the importance of taking into account human factors when designing products.
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banks that need additional funds to meet the reserve requirements of the federal reserve . a. borrow from the state government of the state where their headquarters are located b. decrease the coupon interest rate on the bonds issued to raise funds c. issue treasury bills to investors d. borrow from banks with excess reserves e. exercise the call option on the loans extended to small businesses
In order to support a robust economy for U.S. households, communities, and businesses, the Federal Reserve keeps an eye on the risks to the financial system and participates both domestically and internationally.
Do higher powers have any influence over the Federal Reserve bank?
The Fed is independent in the sense that it makes decisions about monetary policy and other matters on its own and does not need approval from the federal government. In any case, its lead representatives are selected by the President and should be affirmed by Congress.
The Federal Reserve System was created by what law?
The Senate passed and President Woodrow Wilson signed the Federal Reserve Act on December 23, 1913, after a lengthy process that was almost entirely based on party lines.
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thomasino concrete, inc., has earnings of $2,800,000. the firm plans to make an investment in machinery of $1,300,000 in the coming year. using the residual dividend theory, how much can they pay in dividends this year?
$ 1,500,000 they can pay in dividends this year.
As per the Residual dividend policy company will pay Dividends after cutting the investment cost from total earnings.
Therefore Total Dividend Pay this Year = Total Earning - Investment.
Therefore Total Dividend Pay this Year = 2800000 - 1300000
Therefore Total Dividend Pay this Year = $ 1,500,000
A residual dividend coverage calculates dividends paid to shareholders, primarily based on the number of earnings ultimately after capital expenditures had been paid.
Agencies that pay residual dividends use cash go with the flow to cover expenses first, then pay dividends to shareholders from the amount it truly is left over.
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suppose you invest equal amounts in a portfolio with an expected return of 16 percent and a standard deviation of returns of 18 percent and a risk-free asset with an interest rate of 4 percent. calculate the standard deviation of the returns on the resulting portfolio.
Here, in this question Expected return = 0.5(16) + 0.5(4) = 10%.
How do you calculate the expected return of a portfolio with volatility?The predicted return is calculated by using multiplying the weight of each asset with the aid of its expected return. Then add the values for each investment to get the complete anticipated return for your portfolio. Hence, the formula: Expected Portfolio Return = (Asset 1 Weight x Expected Return) + (Asset 2 Weight x Expected Return
When calculating the expected fee of return on a stock portfolio the usage of a weighted common The weights are based totally on the?The fundamental predicted return method entails multiplying every asset's weight in the portfolio by means of its predicted return, then including all these figures together. In other words, a portfolio's predicted return is the weighted common of its person components' returns.
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https://brainly.com/question/25821437#SPJ4which of the following are the primary sources of ethics requirements for tax practitioners? i. aicpa code of professional conduct ii. statements on standards for tax practice iii. circular no. 230 iv. aicpa bylaws
The following are the primary sources of ethics requirements for tax practitioners:
i. aicpa code of professional conduct and iv. aicpa bylawsWhat are ethics requirements for tax practitioners?Tax ethics means the tax payer's ideal duties or responsibilities to pay taxes and is dependent on the relationship between the tax payer and the government. Tax ethics and tax evasion are often used interchangeably. Ethics for tax practitioners are five basic principles of ethics for tax practitioners. These are as follows:
Integrity,Objectivity,Professional competence and due care,Confidentiality, andProfessional behavior.Therefore, three primary sources of ethics are the AICPA code and bylaws, but they only apply to those who are members of the organization, namely practicing accountants.
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Answer:
1 2 3 n 4
Explanation:
A tax practitioner is the one who gives advice and consultations by using his/her knowledge by optimally utilizing the tax law and advanced training. Regarding ethics, the judgement of the tax preparer is paramount here as the profession is not heavily regulated. Therefore, three primary sources of ethics are the AICPA code and bylaws, but they only apply to those who are members of the organization, namely practicing accountants. Treasury dept Circular no. 230 (document specifying rules, regulation, ethical provisions, and procedure to those who practice before IRS) and IRS regulations apply to others. All of these form a firm foundation for ethics in the tax preparation field..
the pbo was $100 million at the beginning of the year. service cost for the year was $12 million. at the end of the year, pension benefits paid by the trustee were $8 million and there were no pension-related oci account. the actuary's discount rate was 5%. what was the amount fo the pbo at the end of the year? (enter your answer in million, round to the nearest million, without dollar sign, ex. 123 or -123).
Other comprehensive profits consists of revenues, expenses, gains, and losses that, according to the GAAP and IFRS standards, are excluded from net income on the earnings statement.
Revenues, expenses, gains, and losses that are pronounced as different comprehensive profits are amounts that have no longer been realized yet.
What is the motive of OCI?OCI is Overseas Citizenship of India. It is an immigration reputation authorising a overseas citizen of Indian starting place to live and work in India for an indefinite period. The OCI card was once launched through the Government of India to meet the needs of the Indians residing overseas who insisted on twin citizenship.
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https://brainly.com/question/26240841#SPJ4equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. accumulated depreciation of $30,000 existed at the time of the sale. the journal entry to be made in the special revenue fund will include
a $5,000 credit to Other Financing Sources.
What are journal entries?
A business transaction is recorded in your books as a journal entry. For every transaction, double-entry bookkeeping requires at least two journal entries. A bookkeeper keeps track of all the changes that a transaction can bring about in a business with journal entries.
What's an example of a journal entry?
The country's purchase of machinery, for which the machinery account will be debited and the cash account will be credited, is an illustration of a journal entry.
What three entries are in the journal?
Journal entries fall into three main categories: adjusting, compounding, and reversing
What are credit and debit?
A transfer of value into an account is referred to as a debit entry, while a transfer of value out of an account is referred to as a credit entry. Value is transferred from credited accounts to debited accounts with each transaction.
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which theory proposes that work satisfaction originates from motivating factors, and dissatisfaction originates from hygiene factors? multiple choice question.
Herzberg theory proposes that work satisfaction originates from motivating factors, and dissatisfaction originates from hygiene factors.
Otherwise called Herzberg's inspiration cleanliness hypothesis, the two-factor hypothesis or the double variable hypothesis, the Herzberg hypothesis expresses that specific component inside a work environment lead to work fulfilment, while others lead to disappointment.
What is Herzberg's two-factor hypothesis of occupation fulfilment?
Frederick Herzberg speculated that representative fulfillment has two aspects: "cleanliness" and inspiration. Cleanliness issues, for example, pay and management, decline representatives' disappointment with the workplace. Inspirations
for example, acknowledgment and accomplishment, make laborers more useful, imaginative and committed.
What are the 4 speculations of occupation fulfilment?
Speculations of occupation fulfilment. Work fulfilment speculations have areas of strength for a with hypotheses making sense of human inspiration. The most well-known and unmistakable hypotheses in this space include:
Maslow's requirements order hypothesisHerzberg's inspiration cleanliness hypothesisThe Work Attributes Model and The dispositional approachLearn more about Herzberg theory here:
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what is one of the primary differences between a coverdell education savings account and 529 savings plan? g
When used for elementary and secondary schools, the main distinction between a 529 and a Coverdell is that a 529 can only be used for tuition, whereas a Coverdell can be used to pay for tuition as well as other school expenses.
A 529 savings plan is more flexible overall but has fewer investment alternatives than a Coverdell savings account since it is only open to families with beneficiaries who meet specified income and age requirements.
The annual contribution cap for Coverdell ESAs is $2,000. That is much less than what you are permitted to put into 529 plans. Lifetime contribution caps for most 529 plans are $350,000 and higher. The eligibility to open a Coverdell ESA account is also based on income.
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why do your colleagues compute mses of the same models twice, and the second time on a different dataset?
The colleagues compute MSE's of same models twice and the second time on a different dataset to increase the probability of correct dataset.
What is a dataset?A group of data is referred to as a data set (or dataset). When dealing with tabular data, a data set is equivalent to one or more database tables, each of which corresponds to a specific record of the corresponding data set and each of whose columns and rows represent different variables. Each member of the data set is given values for each of the variables, such as the object's height and weight, in the data set. A group of papers or files can also make up a data set. The information made available in a public open data repository is measured in open data by data sets.
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what can you conclude about japanese values based on what they borrowed and did not borrow from the chinese?
The Japanese values are popular in the whole world for their respect, love and adoration. They have borrowed these elements from various counties specially China.
Values borrowed and not borrowed from china
The Japanese valued Buddhism over Confucian ideas of meritThe Japanese valued Korean culture over Chinese cultureThe Japanese valued inherited status over merit and competence.
It was done through by sending nobles, students , monks , traders and officials to different part especially china.
Japan was greatly influenced by China's astronomy.influence of cardinal direction.Tosim, Buddhism, culture and languageThis is what Japanese values based on what they borrowed and did not borrow from the Chinese
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why are marginal revenue and price equal for competitive firms? price equals marginal revenue because price is constant for all levels of output. price must decrease as quantity increases. price is the same as total revenue. the demand curve is upward sloping.
Marginal revenue equals price and average revenue for a perfectly competitive business. This suggests that the firm's short-run supply curve for values greater than average variable cost is its marginal cost curve.
The business closes down if the price falls below the average variable cost.
How Does Marginal Revenue Work?
Marginal revenue is the additional revenue generated by selling one more output unit. The law of diminishing returns dictates that marginal revenue can remain constant over a certain output level, but it will eventually slow as output rises. Perfectly competitive businesses, according to economic theory, continue producing goods until marginal cost equals marginal revenue.
Marginal Revenue is the difference between the change in revenue and the change in quantity.
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