The best price for Angela to charge in a scenario where Bob can revise his price too is a concept known as the Nash Equilibrium. This is a situation in which both parties make their best decisions given the decisions of the other party.
The Nash Equilibrium is the price at which neither Angela nor Bob have an incentive to revise their price.To determine the Nash Equilibrium in this scenario, Angela must consider the revision of price that Bob may make in response to her initial pricing decision. If Angela sets her price too high, Bob may revise his price lower to become more competitive. On the other hand, if Angela sets her price too low, Bob may revise his price higher to take advantage of the market.
To determine the Nash Equilibrium, Angela must consider the demand for her product, her costs, and Bob's behavior.
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solve the marketing myopia issue with nokia company by suggesting the best solution to regain the position?
Marketing myopia refers to a narrow focus on short-term product sales and profitability, at the expense of long-term business growth and customer satisfaction. This issue was faced by Nokia, a once dominant player in the mobile phone industry, as it failed to keep pace with the rapid changes in technology and consumer preferences.
To regain its position, Nokia needs to adopt a customer-centric approach and focus on understanding the evolving needs and preferences of its target market. This can be done by conducting market research, regularly engaging with customers, and leveraging customer feedback to drive product and service innovation.
In addition, Nokia should expand its product portfolio to include a wider range of devices and services that cater to the needs of different customer segments.
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which term refers to a form of white blood cell involved in immune response?
Immune system cells include white blood cells. They resemble soldiers standing guard in your bloodstream, ready to fight off intruders like viruses and bacteria. Your body creates extra white blood cells to fight infection.
White blood cells get their name from how a blood sample looks on the outside following centrifugation. White blood cells are produced from stem cells in the bone marrow and are found in the buffy coat, a thin, generally white coating of nucleated cells between the immune cells. Among them are lymphocytes, mast cells, eosinophils, basophils, monocytes, macrophages, dendritic cells, and natural killer cells (B cells and T cells). ent blood plasma and red blood cells.
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suppose a country has 1 billion people. seventy-five percent of its citizens are in the labor force, with 90 million unemployed. full employment occurs at 2 percent. based on this information, what is the unemployment rate?
Consider a nation with a billion inhabitants. The country's unemployment rate is 10%, while of its population are employed.
Unemployment rate = Number unemployed / Labor force * 100%
The number of people who are unemployed are:
= Labor force - Employed people
= 1,00,00,000 - 90,00,000
=100,000 people
Unemployment rate = 100,000 / 900,000 * 100%
= 10%
Being able to work and actively looking for job yet unable to do so is known as unemployment. It's vital to remember that in order to qualify as unemployed, a person must be actively seeking gainful employment in the labor sector.
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Which approach to GDP adds up all the spending on final goods and services that has taken place throughout the year?
Multiple choice question.
O Expenditures approach
O Income approach
O Selling approach
O Capital approach
The spending approach sums up the value of purchases made by final users, such as household purchases of food, televisions, and healthcare services; business investments in machinery; and purchases by the government and foreigners.
Gross capital creation, private final consumption expenditure, government final consumption expenditure, exports, and imports are the components of the expenditure approach to GDP. The expenditure method is the most used technique for calculating GDP, which is a measure of the output of the economy created inside a nation's borders regardless of who owns the manufacturing equipment. This method involves adding up all of the payments made for finished goods and services to determine the GDP.
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How would you characterize the income elasticity of demand of the product?
The answer is income elasticity of demand refers to how responsive a demand for a good is to variations in consumer income.
What is elastic versus inelastic economics?A demand that is elastic experiences a significant shift in quantity demanded as a result of a price adjustment. When a change in price only slightly affects the quantity demanded, this is known as an inelastic demand. The demand is elastic if the formula produces an absolute value greater than 1.
What are the many kinds of elasticity?Elasticity of demand is typically divided into three categories based on the various variables that influence the quantity of a product that is demanded: Price Elasticity of Demand (PED), Cross Elasticity of Demand (XED), and Income Elasticity of Demand (YED). Let's examine them in more detail and consider some of their examples.
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dividends paid by the firm . group of answer choices are tax deductible. increase the firm's equity. are treated as an operating expense. are considered a non-cash expense. are paid out of net income.
Dividends paid by the firm are considered non-cash expenses and are paid out of net income.
Dividends are a way for a corporation to distribute its profits to its shareholders. When a company pays dividends, it is distributing a portion of its net income to its shareholders in the form of cash payments or stock. This payment is considered a non-cash expense because it does not directly involve the exchange of cash, but rather a transfer of wealth from the company to its shareholders.
Dividends increase the firm's equity because they reduce the amount of retained earnings that the company has, which is one of the components of stockholders' equity. The payment of dividends reduces the company's assets and increases its liabilities because it results in a transfer of wealth from the company to its shareholders.
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what is the six-month forward price for a stock providing no income. the stock price is 100 and the continuously compounded interest rate is 5%? what is the forward price if the stock pays a 4%, 5%, 6% continuously compounded dividend yield?
The forward price is the predetermined delivery price agreed upon by the buyer and the seller of the forward contract, to be paid at a predetermined future date, for an underlying good, currency, or financial instrument.
What is the calculation for the forward price of a non-producing investment asset?
F0 = S0 (1+r)T, where r is the risk-free interest rate for the next T years. For any investment asset that doesn't generate income and doesn't require storage, this equation connects the forward price and the spot price. Through the use of arbitrage, trading earnings can be completely derived from risks. Hence, figuring out forward rates. Forward rate is equal to [1 + S1 n1 / 1 + S2 n2]. 1/(n1-n2) – 1
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what is the practice of transferring a firm's activities that have traditionally been internal to external suppliers?
The practice of transferring a firm's activities that have traditionally been internal to external suppliers The term "outsourcing" describes the practise of moving internal business operations to outside vendors.
Outsourcing is a contract in which one company contracts another company to handle a planned or ongoing operation that would otherwise be or might be handled internally in-house, and No later than 1981, the phrase "outside resourcing" gave rise to the term "outsourcing." The idea, which according to The Economist has "made its presence felt since the time of the Second World War," frequently entails contracting out a business process (such as payroll processing or claims processing), operational, and/or non-core functions, like manufacturing, facility management, or call centres and call centre support.Outsourcing can also be used to denote the practise of turning over control of public services to private businesses (privatisation), even if it only takes place sometimes.
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complete the statement below. ______________________ economic analysis is concerned with describing the way things are.
Positive economic analysis is concerned with describing the way things are.
There are to types of economic analysis positive and normative economic analysis among which positive economic analysis is concerned with describing the way things are.
Details about economic analysis :-
Economic analysis essentially entails the evaluation of costs and benefits. It starts by ranking projects based on economic viability to aid better allocation of resources.
Types of economic analysis are:-
1- economic impact analysis
2- programmatic cost analysis
3- benefit-cost analysis
4- cost-effectiveness analysis.
Importance of economic analysis is that it helps us to make decentralized decisions on the appropriate choices between competing uses of resources.
There are four phases for conducting economic analyses for implementation research: (i) Study Design, (ii) Data Collection, (iii) Data Analysis, and (iv) Data Reporting.
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On January 1, 2021, White Water issues $540,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 6% and the bonds issued at $580,169
1. Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021 and December 31,2021
Bond issue on January 1, 2021 is Cash $ 580,169 Premium on Bonds Payable is $ 40,169 and Bonds Payable is $540,000. first two semiannual interest payments are $18900.
The amount that the issuer owes bond holders is kept in an account called "Bonds Payable." Due to the fact that bonds often have a longer maturity period than one year, this account is typically seen in the long-term liabilities area of the balance sheet. Public utilities typically issue bonds to help finance a new electric power plant, hospitals typically issue bonds for new construction, and governments typically issue bonds to fund projects, cover operating deficits, or redeem older bonds that are approaching maturity. Because it is expected to be paid within the next year, bond interest payable is categorized as a current liability.
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Which of the following actions would an organization take if it decides to pursue a best-cost provider strategy?
A) offering the best prices in its industry on its goods and/or services
B) attempting to gain monopoly in the market by means of an unhealthy competition
C) offering products or services of reasonably good quality at competitive prices
D) providing high quality products at low prices in specific markets
E) offering low quality products at low prices with high quality after-sales services
If an organization decides to pursue best-cost provider strategy, it may take actions such as C)offering products or services of reasonably good quality at competitive prices, D)providing high quality products at low prices in specific markets, E)offering low quality products at low prices with high quality after-sales services.
The goal of a best-cost provider strategy is to provide customers with a good balance of quality, price, and value, in order to differentiate the organization from its competitors and attract a broad range of customers.
If an organization decides to pursue a best-cost provider strategy, it may take the following actions:
C) offering products or services of reasonably good quality at competitive prices: A best-cost provider seeks to provide products or services that are of good quality, but not necessarily the highest quality available in the market. By offering good quality products or services at competitive prices, the organization can attract customers who are looking for a good balance of quality and price.D) providing high quality products at low prices in specific markets: A best-cost provider may target specific markets where they can offer high quality products at low prices in order to attract price-sensitive customers. By focusing on specific markets, the organization can maximize its competitiveness and gain a competitive advantage.E) offering low quality products at low prices with high quality after-sales services: A best-cost provider may also offer low quality products at low prices, but with high quality after-sales services, in order to attract customers who place a high value on good customer service. By offering good after-sales services, the organization can differentiate itself from competitors and build customer loyalty.To know more about best-cost provider strategy refer here:
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What is the present value of the following?a. A $300 perpetuity, discounted back to the present, at 8%b. A $1,000 perpetuity, discounted back to the present, at 12%c. A $100 perpetuity, discounted back to the present, at 9%d. A $95 perpetuity, discounted back to the present, at 5%
The present value of the following is $1,900.The present value of a perpetuity can be calculated by using the formula:
PV = C / r
Where:
PV = present value
C = the constant payment (also known as the annuity)
r = the discount rate
a. A $300 perpetuity, discounted back to the present, at 8%:
PV = $300 / 0.08 = $3,750
b. A $1,000 perpetuity, discounted back to the present, at 12%:
PV = $1,000 / 0.12 = $8,333.33
c. A $100 perpetuity, discounted back to the present, at 9%:
PV = $100 / 0.09 = $1,111.11
d. A $95 perpetuity, discounted back to the present, at 5%:
PV = $95 / 0.05 = $1,900
These calculations show the present value of the perpetuity, discounted back to the present, at the specified interest rate. The present value represents the value of the future cash flows today.
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city bus corporation provides school bus transportation to public schools in lancaster county. city bus owns 50 buses that are garaged in three different cities within the county. the firm faces competition from two larger bus companies that operate in the same area. public school boards generally award contracts to the lowest bidder, but the level of service and overall performance are also considered. briefly describe the steps in the risk management process that should be followed by the risk manager of city bus. identify the major loss exposures faced by city bus. for each of the loss exposures identified in (b), identify a risk management technique or combination of techniques that could be used to handle the exposure. describe several sources of funds for paying losses if retention is used in the risk management program. identify other departments in city bus that would also be involved in the risk management program.
50 buses that belong to City Bus are kept in three distinct county cities. Two more established bus companies that run compete with the business.
What is the main loss exposure that city buses are exposed to?
exposure to liability losses. Losses that a bus may cause are referred to as liabilities. For instance, the bus might be a part of an accident when a third party loses anything. The bus also contributes to environmental damage through noise and emissions. If retention is employed in a risk management programme, the following sources of money could be used to cover losses: • Recover losses using available cash flow Establish a funded reserve. Arrange a credit line with a bank in advance of a loss.
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the real world has moved away from using blank for calculating future and present values. multiple choice question. mathematical formulas time value of money tables financial calculators spreadsheets
The real world has moved away from using time value of money tables for calculating future and present values.
What is time value of money tables?The table is utilized similarly to the previously stated time value of money tables. To calculate the present value of a future amount, identify the proper number of years and interest rate, then multiply the resultant factor by the future value.
While a solid solution, a financial calculator is more accurate due to rounding issues. Inflation may be calculated using tables, but it must be factored into your discount rate.
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if there is excessive idle time for equipment on the job, to what factor may this attribute?
If there is excessive idle time for equipment on the job, a factor that may this attribute condition is lack of demand for the product being product.
What does an idle time mean in production process?Idle time, also known as waiting time, is the time when an asset—a machine or an employee—is ready and available to work but does nothing productive. Idle time is the time when a viable piece of equipment is not scheduled to run or stops working because there is no demand.
Businesses use maintenance management software to reduce downtime and increase efficiency. This idle time applies to a facility's machines, employees, and equipment. Too much idle time leads to a lack of productivity, which leads to money being left on the table.
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Identify which user of accounting information would mainly use managerial accounting information. The controller is usually responsible for general financial accounting, managerial accounting, and tax reporting.
Financial accounting often oversees finance or accounting, both of which are in charge of creating the financial statements for the organisation.
The finance department or a different management may also be involved in managerial accounting and tax reporting. However, the CFO would still be in charge of the same department (chief financial officer).
Creditors, tax authorities, investors, customers, and regulatory bodies would most likely utilise financial accounting information. These consumers are worried about financial status, accounting information disclosure, credibility, and credit worthiness.
The management, employees, and owners would most likely utilise managerial accounting information.
Owners, investors, and consumers are the users who utilise both.
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while there are many concerns with a loss of net neutrality, which would most concern the founders?
While there are many concerns with a loss of net neutrality, but which most concern the founders is lack of commercials and censorship.
The restriction of speech, mass discussion, or other data is known as censorship. On the grounds that the content is deemed undesirable, damaging, sensitive, or "inconvenient," this may be done.
Commercials are an effective marketing technique that may be used to draw customers, educate them regarding your products, and gain their confidence. Most businesses employ some form of advertising to help them market their goods and services. Advertising is recognised to have a variety of effects on customers, from raising the popularity of a product or item to influencing a purchase decision. Advertising has the power to alter consumers' perspectives in a variety of ways.
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Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. Labor Hours Needed to Make 1 Unit of Number of Units Produced in 40 Hours Bread 4 Bread 10 Cheese England Spain 40 10 4 Refer to Table 3-5. If England and Spain each spends all its time producing the good in which it has a comparative advantage and the countries agree to trade 2 units of bread for 6 units of cheese, then England will consume a. 34 units of cheese and 12 units of bread and Spain will consume 6 units of cheese and 3 units of bread. B. 34 units of cheese and 12 units of bread and Spain wil consume 16 units of cheese and 3 units of bread c. 34 units of cheese and 2 units of bread and Spain will consume 16 units of cheese and 3 units of bread d. 34 units of cheese and 2 units of bread and Spain will consume 6 units of cheese and 3 units of bread
Opportunity cost is the forgone benefit that would have been gotten from an option not picked.
England opportunity cost of production of Cheese = 10 bread / 40 Cheese = 0.25 bread England opportunity cost of production of Bread = 40 cheese / 10 bread.
To appropriately evaluate opportunity costs, the costs and benefits of each and every option available should be considered and weighed against the others.
Considering the value of opportunity costs can direct individuals and organizations to more profitable decision-making.
Opportunity cost is a stringently internal cost utilized for strategic contemplation; it is excluded from accounting benefit and is prohibited from external financial revealing.
Examples of opportunity cost remember putting for another manufacturing plant in Los Angeles rather than Mexico City, choosing not to upgrade company hardware, or picking the most costly item packaging option over cheaper options.
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grady is a member of a large family and received the following payments this year. for each payment, determine whether the payment constitutes realized income and determine the amount of each payment grady must include in his gross income. note: leave no answer blank. enter zero if applicable. required: a. a gift of $20,000 from grady's grandfather. b. one thousand shares of gm stock worth $120 per share inherited from grady's uncle. the uncle purchased the shares for $25 each, and the shares are worth $125 per share at year-end. c-1. a gift of $59,000 of ford motor bonds. c-2. grady received the bonds on october 31, and he received $1,500 of semiannual interest from the bonds on december 31. d. a loan of $5,000 for school expenses from grady's aunt.
The gross income is nil. Gifts are realised revenue that are completely excluded from being included as gross income.
How much is a gross income?Gross income, sometimes referred to as gross pay on a paycheck, is the total of a person's earnings before taxes and perhaps other deductions. This includes income from all sources, not only labour, and is not limited to income received in cash; it also includes income received in the form of goods or services.The phrases gross income, gross margin, as well as gross profit have the same meanings for enterprises. A company's gross income is computed on the income statement as total revenue less cost of goods sold (COGS).To learn more about gross income visit;
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why are industries fragmented
Industries are fragmented due to the lack of access to capital, labor, and technology. This creates a barrier for smaller companies
Industries are fragmented due to the lack of access to capital, labor, and technology. This creates a barrier for smaller companies to compete in the market, forcing them to specialize in certain areas or products. This fragmentation can be exacerbated by limited access to resources, lack of collaboration between stakeholders, or governmental policies. By limiting competition, fragmentation can also lead to a decrease in quality and efficiency, as well as higher prices. On the other hand, fragmentation can also create an environment of specialization, enabling companies to focus on their strengths and increase the variety of products available to consumers.
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Which of the following statements regarding specialization and trade is true?
A) With specialization and trade, a country's production possibilities curve shifts out, showing an increase in productive capacity.
B) With specialization and trade, a country will produce a combination of goods beyond its production possibilities curve.
C) To gain from trade, countries specialize in producing goods and services in which they have an absolute advantage.
D) With specialization and trade, a country can consume beyond its production possibilities curve.
E) A country must have both the comparative and the absolute advantage in a product to specialize and gain from trade.
With specialization and trade, a country can consume beyond its production possibilities curve.
What is production possibilities curve?The production possibility frontier (PPF) is a curve on a graph that depicts the potential output of two goods whose production is dependent on the same limited resource. Another name for the PPF is the production possibility curve.
PPF is important in economics as well. For instance, it can show that a country's economy has achieved the maximum level of effectiveness. The production possibility frontier (PPF), which depicts situations that are impractical given the available resources, is above the curve.
The PPF illustrates that an increase in one commodity's production can only occur when the production of the other commodity falls. Managers can use the PPF as a tool for making decisions when determining the best product mix for their organization.
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For each of the following scenarios involving the U. S. Government, determine the primary function of government that is being served.
Microsoft, the operating system giant, was recently accused of illegal business practices aimed at significantly increasing its market share.
a. Productive function whereby the government promotes economic stability through fiscal policies
b. Productive function whereby the government maintains market competition
c. Productive function whereby the government redistributes income from rich to poor
d. Protective function whereby the government enforces property rights
a. Productive function whereby the government promotes economic stability through fiscal policies.
The use of taxation and expenditure by the government to affect the economy is known as fiscal policy. Fiscal policy is often used by governments to encourage robust, long-term growth and to lower poverty.
For instance, governments can decrease taxes and increase spending to stimulate the economy if necessary; normally, they spend on social programs and infrastructure projects that generate income and jobs. Or, if somehow the economy is growing, a government may decide to cut spending while raising taxes.
Fiscal contraction and fiscal stimulus are the two categories of fiscal policy. When the government seizes more than it spends, this is known as a contractionary fiscal policy. Fiscal expansion occurs whenever the government spends greater amounts than it collects in taxes.
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for some, the first name that might come to mind when referencing early accounting history is
For many, the first name that comes to mind when referencing early accounting history is Luca Pacioli. He was an Italian mathematician and Franciscan friar who lived in the 15th century. He is considered the father of modern accounting and is widely recognized for his contribution to the field.
Pacioli was born in Sansepolcro, Italy in 1445 and was a brilliant student from a young age. He excelled in mathematics, which led him to pursue a career in accounting. He wrote several books on the subject, including the famous "Summa de Arithmetica, Geometria, Proportioni et Proportionalita", which was published in 1494.
This book is considered to be the first comprehensive treatise on the principles of accounting and it laid the foundation for modern accounting practices.
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a summary of significant accounting policies includes information regarding multiple choice question. achievement of performance targets. the calculation of specific items. management's intentions in the future. the choice of accounting policies.
A summary of significant accounting policies includes information is the choice of accounting policies.
The financial statements of an entity are accompanied by a section of footnotes that lists the main accounting policies that the entity's accounting department is required to follow. Typically, this summary appears at or very close to the start of the footnotes. The applicable accounting framework requires the disclosure of the policy summary (such as GAAP or IFRS). These frameworks mandate that a company reveal its most significant policies, as well as whether or not they are appropriate and how they affect the firm's reported financial status. A wide range of operational and financial policies, such as those pertaining to cash, receivables, intangible assets, asset impairment, inventory valuation, different forms of liabilities, revenue recognition, and capitalised costs, may be included in the policy summary.
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On January 1, 2020, Oriole, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,338,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2020, to finance the construction cost, Oriole borrowed $4,338,000 payable in 10 annual installments of $433,800, plus interest at the rate of 10%. During 2020, Oriole made deposit and progress payments totaling $1,626,750 under the contract; the weighted-average amount of accumulated expenditures was $867,600 for the year. The excess borrowed funds were invested in short-term securities, from which Oriole realized investment income of $261,400. What amount should Oriole report as capitalized interest at December 31, 2020?
Oriole should report $86,760 as capitalized interest at December 31, 2020.
To calculate the amount of capitalized interest at December 31, 2020, we need to determine the average amount of accumulated expenditures during the year and the applicable interest rate.
Weighted-average accumulated expenditures for the year: $867,600
Applicable interest rate: 10%
Capitalized interest for 2020 = Weighted-average accumulated expenditures x Applicable interest rate
Capitalized interest for 2020 = $867,600 x 10% = $86,760
Therefore, Oriole should report $86,760 as capitalized interest at December 31, 2020.
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how can compound interest increase your investment’s growth?
Compound interest can increase your investment's growth because it calculates interest on te principal amount and accrued interest.
Compound interest refers to interests earned from the original principal plus the accumulated interest. Compound interest allows an investor to gain interest from his already earned interests. Compound interest works on the "snowballing effect", the interests grows at it becomes bigger at faster rate.
Compound interest can be calculated by multplying the initial principal investment with one plus the annual interest rate raised by the number of compound periods minus one. Compound interest can be calculated using formula of:
Compound interest = P [(1 + i)ⁿ - 1]
where:
P = principal investment
i = nominal annual interest rate
n = number of periods
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when did it become common for the national government to actively manage the overall economy?
The national government began actively managing the entire economy starting in 1930.
Since the 1930s Great Depression, citizens have held the government accountable for preserving a robust economy. Governments become involved in their nations' economic operations. By putting currency reserves at centralized institutions, the Federal Reserve System started to play a role in aiding the American economy in preventing another downturn in the 1930s.
The provision of social programs by the government to its people may be the most contentious issue of all. The New Deal programs in the United States, many of which offered people assistance through jobs, cash, and food, are credited with starting the custom. President Lyndon Johnson presented his "GREAT SOCIETY" initiatives to alleviate poverty in the 1960s.
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covid-19 and the resulting shutdowns and mandated wearing of masks had a dramatic impact on most businesses, what resulted in a contraction in many but an expansion in others. pandemic and related restrictions will be considered?
The COVID-19 pandemic and resulting shutdowns and mandates had a significant impact on businesses, resulting in Contraction of many businesses.
What resulted in a contraction in many but an expansion in others.?Brick-and-mortar retail stores, such as clothing, electronics, and department stores, as people were forced to stay at home and avoid non-essential shopping.Restaurants and bars, as dining-in was limited and many had to close temporarily.Tourism and hospitality industry, as travel was restricted and many events were cancelled.Entertainment industry, such as movie theaters, live performance venues, and amusement parks.Expansion of other businesses, including:Online retail and e-commerce, as people relied more heavily on online shopping.Delivery and logistic services, as people were unable to go to physical stores and needed food and other essentials delivered to their homes.Technology companies, as remote work and virtual communication became more widespread.Healthcare and pharmaceuticals, as demand for medical supplies and treatments increased.Overall, the pandemic has resulted in a shift in consumer behavior and a reconfiguration of the business landscape, with some industries declining and others growing.To learn more about pandemic refer:
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describe the importance of regulation for managers and explain the interest group model of regulation
Regulations are significant because they define what you can and cannot do in business.
What is interest group model of regulation?The interest groups have both supporters and also detractors. Critics argue that they only benefit those with significant wealth and power.An interest group's primary goal is to influence the public policies in favor of themselves or their causes. Other goals of these organizations include educating the public and policymakers on the issues they seek to address.A special interest group (SIG) is a community within a larger organization that has a shared interest in advancing a specific area of knowledge, learning, or technology. Members collaborate to affect or produce solutions within their specific field, and may communicate, meet, and organize conferences.To learn more about interest group refer to :
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assume you own a greenhouse that can be used to grow mums (in pots), pansies (in flats), or a combination of each. you are currently producing 810 pots of mums and 1267 flats of pansies. you are considering increasing your mums to 925 pots, but in order to do this you will have to reduce your pansies to 1119 flats. assume mums currently sell for $3.00 per pot and pansies currently sell for $1.00 per flat. what is your output substitution ratio?
The output substitution ratio is the output profit ratio at the best profit, which is the maximum level of enterprises. It is calculated by dividing the quantity of output of the first enterprise given up by the quantity of output of the other enterprise gained.
The formula for the calculation of the output substitution ratio:
Output substitution ratio = Quantity of output lost / Quantity of output gained
Output substitution ratio = Quantity of Output Lost by pansies / Quantity of Output Gained by Mums
So, the output substitution ratio = (1267 - 1119) / (925 - 810) = 148 / 115
Output substitution ratio = 1.29
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