Suppose a firm calculates its EFN and finds that it is negative. What are the firm's...
Suppose a firm calculates its EFN and finds that it is negative. What are the firm's options in this case? Please explain as many options as possible.
Homework Answers
When a company has negative EFN (external financing needs) that means the company has funds surplus. This extra funds can be used by the company to repay its debt, repurchase of shares, pay more dividends or to reduce the current liabilities. In addition, the company might go for acquisition or add more long term assets if the company is finding any good investment opportunities in the market to these extra funds at that time.
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Suppose a firm calculates its EFN and finds that it is negative.
What are the firm's...
3. The Firm's Problem and Taxes (30 points total). Suppose the representative firm has a production...
3. The Firm's Problem and Taxes (30 points total). Suppose the representative firm has a production function given by Y = 2K" , where =K=4. The real wage equals 2. Suppose the firm is subject to a revenue lax. Specifically, the firm has to pay $l to the government for each Sl worth of output sold alternatively, pay units to the government for each unit of output sold). (a) (5 points) Write down the firm's maximization problem. (b) (5 points)...
Please answer a-d Assume that a business firm finds that its profit ia greatest when it...
Please answer a-d
Assume that a business firm finds that its profit ia greatest when it produoes $40 worth of product A. Suppose also thet each of the three techniques shown in the table below will produce the deslred output LO3 Resource units required Labor Land Capital Entrepreneurial ability 3 2 a. With the resource prices shown, which technique will the firm choose? Why? Will production using that technique entail profit or loss? What will be the amount of that...
A company calculates its contribution margin to be a negative number. How is this possible? Select...
A company calculates its contribution margin to be a negative number. How is this possible? Select one: a. The selling price is less than the variable costs b. The company is not selling enough units c. Profits are greater than total costs d. On a per unit basis, fixed costs are less than variable costs
If a firm's marginal cost exceeds its marginal revenue, then a. profit is negative b. the...
If a firm's marginal cost exceeds its marginal revenue, then a. profit is negative b. the firm should shut down c. cutting back production will increase profits d. the firm should reduce its per-unit cost by increasing its output
a purely competitive firm finds that the market price for its product is $30 it has...
a purely competitive firm finds that the market price for its product is $30 it has a fixed cost of $100 and a variable cost of $15 per unit for the first 50 units and then $35 per unit for all successive units. what is the average variable cost for the first 100 units? what output level will yield the largest possible profit for this purely competitive firm?
Suppose that a firm manufactures wallets. The firm's fixed cost is $102,972, and the variable cost...
Suppose that a firm manufactures wallets. The firm's fixed cost is $102,972, and the variable cost is $3 per wallet. If each wallet sells for $71, how many wallets need to be sold in order for the firm's profit to be $54,104?
Suppose a firm has a cost curve equal to C 7200+150Q. The firm's demand curve is...
Suppose a firm has a cost curve equal to C 7200+150Q. The firm's demand curve is p-550 2Q. (Round all numeric responses to two decimal places,) If regulators set the price equal to the marginal cost, what would be the firm's loss? $ -7200 If the regulators set the price equal to the average cost, what would be the price? S 190.00 What would be the deadweight loss in this case of average cost price regulation? $
5. Suppose that a competitive firm's marginal cost of pro- ducing output q is given by...
5. Suppose that a competitive firm's marginal cost of pro- ducing output q is given by MC(q) = 3 + 2q. Assume that the market price of the firm's product is $9. a. What level of output will the firm produce? b. What is the firm's producer surplus? c. Suppose that the average variable cost of the firm is given by AVC(q) = 3 + q. Suppose that the firm's fixed costs are known to be $3. Will the firm...
Suppose that a competitive firm's marginal cost of producing output q (MC) is given by MC(q)...
Suppose that a competitive firm's marginal cost of producing output q (MC) is given by MC(q) = 6 +29. Assume that the market price (P) of the firm's product is $18. What level of output (q) will the firm produce? The firm will produce 6.00 units of output. (Enter your response rounded to two decimal places.) What is the firm's producer surplus? Producer surplus (PS) is $ 36.00. (Enter your response rounded to two decimal places.) Suppose that the average...
1.Suppose that a firm is involved in a major litigation and is expected to lose its...
1.Suppose that a firm is involved in a major litigation and is expected to lose its case, which would cost the firm millions of dollars. Surprisingly, however, the firm wins the case and immediately the stock price jumps. Is the observation of the price increase consistent with the semi-strong form of the efficient market hypothesis? Explain. 2. What factors would impact the price of preferred shares?
3. The Firm's Problem and Taxes (30 points total). Suppose the representative firm has a production function given by Y = 2K" , where =K=4. The real wage equals 2. Suppose the firm is subject to a revenue lax. Specifically, the firm has to pay $l to the government for each Sl worth of output sold alternatively, pay units to the government for each unit of output sold). (a) (5 points) Write down the firm's maximization problem. (b) (5 points)...
Please answer a-d
Assume that a business firm finds that its profit ia greatest when it produoes $40 worth of product A. Suppose also thet each of the three techniques shown in the table below will produce the deslred output LO3 Resource units required Labor Land Capital Entrepreneurial ability 3 2 a. With the resource prices shown, which technique will the firm choose? Why? Will production using that technique entail profit or loss? What will be the amount of that...
A company calculates its contribution margin to be a negative number. How is this possible? Select one: a. The selling price is less than the variable costs b. The company is not selling enough units c. Profits are greater than total costs d. On a per unit basis, fixed costs are less than variable costs
Suppose a firm has a cost curve equal to C 7200+150Q. The firm's demand curve is p-550 2Q. (Round all numeric responses to two decimal places,) If regulators set the price equal to the marginal cost, what would be the firm's loss? $ -7200 If the regulators set the price equal to the average cost, what would be the price? S 190.00 What would be the deadweight loss in this case of average cost price regulation? $
5. Suppose that a competitive firm's marginal cost of pro- ducing output q is given by MC(q) = 3 + 2q. Assume that the market price of the firm's product is $9. a. What level of output will the firm produce? b. What is the firm's producer surplus? c. Suppose that the average variable cost of the firm is given by AVC(q) = 3 + q. Suppose that the firm's fixed costs are known to be $3. Will the firm...
Suppose that a competitive firm's marginal cost of producing output q (MC) is given by MC(q) = 6 +29. Assume that the market price (P) of the firm's product is $18. What level of output (q) will the firm produce? The firm will produce 6.00 units of output. (Enter your response rounded to two decimal places.) What is the firm's producer surplus? Producer surplus (PS) is $ 36.00. (Enter your response rounded to two decimal places.) Suppose that the average...
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