Debit loss on purchase commitment $1,000; Debit inventory $24,000; Credit cash $25,000.
What does "market pricing" mean?Market pricing is a tactic used to set prices in accordance with what is currently being paid in the market for identical or comparable goods and services. Businesses are given the chance to establish higher pricing initially before lowering them to match market rates in order to remain competitive while still increasing return on investment.
What distinguishes the market price from the present price?the market price and the cost price. The cost price is the cost you paid to buy the stock, but the market price is the price it is now trading at. Typically, estimates of value are used to calculate the difference between cost price and market price.
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When evaluating manager performance of an international business, the text lists several items that should be allowed for since managers would have no control over them. Which three items are included in that list?.
The three items are included in that list are interest rates, transfer prices, and tax rates.
What is international business performance?
By using this return on investment approach, the success of the global company may be assessed. Using this approach, it is possible to assess the link between capital invested and profit. The fact that the ROI should be rising is a positive sign for the company.
The method used most frequently to assess the performance of a international company is return on investment. It includes practically all significant performance-related parameters and illustrates the relationship between profit and invested capital. Evaluation of a person who temporarily transfers expertise to a foreign company is known as international performance management.
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on september 1, ziegler corporation had 55,000 shares of $5 par value common stock, and $165,000 of retained earnings. on that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. the general journal entry to record this transaction is:
The general journal entry to record this transaction is None. No transactions will be recorded.
74,000 common shares at $5 a piece stock
profits kept of $222,000
Corporation had 55,000 shares of $5 par value common stock, and $165,000 of retained earnings.
A company splits its shares two for one.
This transaction's general journal entry will be NONE. For this transaction, there is no journal entry. The 2-for-1 stock split will only be noted in a memo item.
No entry is made because the overall dollar amount stays the same.
A memorandum entry is a brief statement that is both entered into the general journal and a general ledger account. There is no debit or credit amount.
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true or false: the tax cuts and jobs act of 2017 eliminates the tax issue about repatriating overseas profits.
The given statement is false. Deductions, depreciation, expensing, tax credits, and other business-related tax items have been altered as a result of the Tax Cuts and Jobs Act ("TCJA"). Business owners can use this side-by-side comparison to comprehend the changes and make appropriate plans.
The Tax Cuts and Jobs Act, which reduces taxes while increasing government expenditure on numerous programs, is an example of an expansionary fiscal policy. The Tax Cuts and Jobs Act, passed under President Donald Trump, fundamentally altered the rates of deductions, depreciation, tax credits, and other factors affecting business owners. The Tax Cuts and Jobs Act also stipulates that firms who offer paid family and medical leave to their staff are eligible for a tax credit. The Act is based on the tax reform ideas that the Trump administration and legislative Republicans have supported.
According to the impartial Congressional Budget Office (CBO), the Act would result in around $1.125 trillion in net benefits for individuals and pass-through businesses like partnerships and S companies.
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computing eps: convertible bonds a company has outstanding $140,000 of 8% convertible bonds due in five years. each $1,000 convertible bond is convertible into 40 shares of common stock. net income for the year was $896,000. common shares outstanding for the year were 375,000. the relevant tax rate is 25%. a. compute basic earnings per share. b. compute diluted earnings per share. note: enter the earnings per share amounts in dollars and cents, rounded to the nearest penny. net income available to common stockholders weighted avg. common shares outstanding per share basic eps answer answer answer diluted eps answer answer answer
Net income available to Weighted avg. Common Per Share
Common stockholders. Shares outstanding
(a) (b) (a-b)
Basic EPS $896,000 375,000 $2.39
Diluted EPS $904,400 380, 600 $2.38
No. of Common shares to compute diluted EPS
= Common shares + Convertible doods
375,000 + [$140,000 x 40/$1000]
= 375,000 + 5,600
= 380,600
To calculate earnings per share, subtract preferred dividends from the company's net income. Then divide that amount by the average number of common shares outstanding. Subtract preferred dividends from a company's net income and divide the result by the sum of the weighted average number of shares outstanding and the number of diluted shares.
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comparing marginal revenue to marginal cost (i) reveals the contribution of the last unit of production to total profit. (ii) is helpful in making profit-maximizing production decisions. (iii) tells a firm whether its fixed costs are too high. question 29 options: a) (i) only b) (i) and (ii) only c) (ii) and (iii) only d) (i) and (iii) only
Comparing marginal revenue to marginal cost reveals the contribution of the last unit of production to total profit is helpful in making profit-maximizing production decisions
The marginal cost of production and marginal revenue are economic measures used to determine the amount of output and the price per unit of a product that will maximize profits. Understanding a few common production jargon is crucial for optimizing marginal cost and income. Every company that incurs production expenditures might categorize them into two main groups:
Fixed costs: These are necessary expenditures that remain largely constant throughout time, notwithstanding your company's growth in output. Costs that fluctuate from month to month or from day to day are known as variable costs. Instead, depending on output levels, they can change dramatically.
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maria owns a store that prepares gourmet chocolates, which are hand-made and sold on the premises. what type of product is maria selling?
Gourmet chocolates are produced by hand and sold in Maria's shop, Unsought, which she owns.
Which of the following is in charge of transferring products and services from suppliers to consumers?An intermediary is a privately held or corporately controlled company that aids in the transfer of goods from the manufacturer to the final customer. a group of wholesalers and retailers who purchase products from other sellers and resell them.
What do the four stages of a product's lifecycle entail and how does it benefit businesses?Introduction, growth, maturity, and decline are the four stages that make up a product's life cycle. Professionals in management and marketing use product life cycles to assist them decide on advertising schedules, price points, expanding into new product markets, redesigning packaging, and more.
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which of the following statements is true? question 3 options: variances are the differences between total actual costs and total standard costs. when actual costs exceed standard costs, the variance is favorable. an unfavorable variance results when actual costs are decreasing but standards are not changed. all of the above are true
Variances are the differences between total actual costs and total standard costs.
In chance principle and records, variance is the expectancy of the squared deviation of a random variable from its populace imply or sample suggest. Variance is a degree of dispersion, meaning it is a measure of the way far a hard and fast of numbers is spread out from their average value. Variance has a primary role in facts, in which some ideas that use it include descriptive information, statistical inference, speculation testing, goodness of in shape, and Monte Carlo sampling.
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you made changes to your business listing, but flagged the edits as pending. what do you need to do so your updated information appears in your listing?
Undoing the flag of edits from the status of 'pending' and correcting them to 'completed' will help in making the updated information appear on the changes being made to the business listing.
Business listings can be referred to or considered as the mentioning of an entity with respect to the name and other important credentials of the business. However, it is also to be noted that the business listings are not limited to the scope of only its credentials for a large of it. The business listings can be identified with the help of innumerable citations.
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Answer:
its D trust me
Explanation:
true or false: asset retirement obligations (aros) arise only from legal obligations associated with the retirement of a long-
Asset retirement obligations (aros) arise only from legal obligations associated with the retirement of a long. its true.
Contractual requirements for the ultimate removal of machinery or the cleanup of hazardous materials from a leased premises when tangible, long-lived assets are retired are known as asset retirement obligations (AROs). Asset Retirement Obligations (ARO) are typically connected to industries including waste management, mining, nuclear energy, and oil and gas. Examples related to the oil and gas industry include dismantling underground storage tanks and blocking and abandoning oil wells. If it is reasonably practicable to estimate the extent of the liability, asset retirement obligations are first recognized at fair value in the period in which they are incurred.
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An indulgence was a cancellation of the worldly punishment due to a sin for which a priest has offered forgiveness. The selling of indulgences was a major cause of the.
Indulgences were designed to provide a reprieve from the temporal punishment for sin, comparable to what may be obtained by engaging in a canonical penance for a set amount of time.
Is indulgence the atonement for sin?Indulgences were a unique aspect of the penitential systems of both the Roman Catholic and Western medieval churches, allowing for full or partial forgiveness of the penalty for sin.
By indulgence, what did Luther mean?Luther objected to the idea that people may purchase indulgences, which would lessen their penalty after death. Catholicism claims that before entering paradise, people must undergo purification in the Purgatory fire.
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how should the clothing retailer respond to the posts? engage the writer of the positive post, and address the negative post. address the negative post, and let the positive post stand without a response. ignore the negative post, and thank the author of the positive post.
The clothing retailer respond to the posts ignore the negative post and thank the author of the positive post.
When customers purchase a product and promote it to the very last clients for his or her consumption, and now no longer to any dealer or wholesaler, that is referred to as Retail. The shops are the mediator among wholesaler and clients. They buy items from the wholesaler and promote them to the remaining clients in small quantity.
Clothing (additionally referred to as clothes, apparel, and attire) are objects worn at the body. Typically, garb is manufactured from fabric or textiles, however through the years it has blanketed clothes crafted from animal pores and skin and different skinny sheets of substances and herbal merchandise discovered withinside the environment, positioned together.
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classify the following journal entry: accountdebitcredit unearned revenue985 fees earned985 a.closing entry b.transaction entry c.adjusting entry d.none of these choices
The journal entry to debit Unearned Revenue a/c and credit the Fees Earned account by $985 is classified as adjusting entry.
What the unearned revenue entry indicates?An unearned revenue adjustment entry represents a change in the amount of unearned income previously declared. Unearned income is any sum paid in advance by a client to a business. This payment may be for future services or items to be delivered.
Unearned income is money received by a person or business for a service or product that has yet to be produced or delivered. It is reported as a liability on a company's balance sheet, since it indicates a debt owing to the consumer.
Therefore, option C is correct.
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Amos always felt that it was unfair that society created artificial divisions that discouraged him from having friends from different social structures.Which of the following terms describes the process that Amos is having difficulty with?
A) Reference group affiliation
B) Bias
C) Social anxiety
D) Social stratification
Amos always felt that it was unfair that society created artificial divisions that discouraged him from having friends from different social structures. The process that can best describes his situation is social stratification.
Social stratification refers to the ranking of people or groups of people within a society. But the term was defined by the earliest sociologists as something more than the almost universal inequalities that exist in all but the least complex of societies. Social stratification refers to a society's categorization of its people into rankings based on factors like wealth, income, education, family background, and power. Factors that define stratification vary in different societies.
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required: in what jurisdiction(s) does gk, inc. have more than $100,000 in sales? in what jurisdiction(s) does gk, inc. have more than 200 transactions? based on general economic nexus thresholds, in what jurisdiction(s) should gk, inc. register to collect and remit sales tax? the sales tax rate in indiana is 7%. how much tax should have been collected from sales made to indiana customers?
Answer: Indiana would collect and remit $24,151.
States with more than 100,000 in sales are: Indiana, Michigan, Utah
States with more than 200 transactions are: Illinois, Indiana, Michigan, Iowa
The jurisdictions they should collect in are Indiana, Michigan, Utah, Illinois, Iowa
Explanation:
Total of Indiana Sales $345,016 multiply the 7 percent sales tax=
345016*.07=24151.12
Round to nearest dollar equals $24,151
Sales tax is a tax paid to a government for the sale of certain goods and services. In general, the law allows the seller to collect tax money from the consumer at the time of purchase.
When the consumer pays the tax on goods or services directly to the administrative body, it is usually called a use tax. Sales tax is extra money you pay based on a certain percentage of the sales price of goods and services. bought For example, if you buy a new TV for $400 and you live in an area with a 7% sales tax, you would pay $28 in sales tax. Your total bill would be $428.88
Indiana would collect and remit $24,151. States with more than 100,000 in sales are: Indiana, Michigan, Utah States with more than 200 transactions are: Illinois, Indiana, Michigan, Iowa. The jurisdictions they should collect in are Indiana, Michigan, Utah, Illinois, Iowa.Total of Indiana Sales $345,016 multiply the 7 percent sales tax= 345016*.07=24151.12. Round to nearest dollar equals $24,151
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liliana de la cruz puts $30,000 into a load mutual fund. she knows that her up-front sales charge is 2.5 percent. how much of her money actually goes to buy shares in the mutual fund? multiple choice $30,750 $29,250 $7.50 $750 $30,000
If liliana de la cruz puts $30,000 into a load mutual fund. she knows that her up-front sales charge is 2.5 percent. The amount of her money that actually goes to buy shares in the mutual fund is: B. $29,250
What is mutual fund?A mutual fund can be defined as the way in which companies tend to help investors invest their money into stocks, bonds among others.
Now let determine the mutual fund suing this formula
Mutual fund = Loan mutual fund -(Load mutual fund × Up-front sales charge)
Let plug in the formula
Mutual fund = $30,000 - ($30,000 × 2%)
Mutual fund = $30,000 - $750
Mutual fund = $29,250
Therefore the correct option is B.
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one of the objectives of in an unsolicited sales message is to introduce a relationship between the audience and the product, service, or idea.
The core of your sales message is a benefit, which is what the customer receives as a result of the purchase. They might improve their popularity, social standing, sex appeal, or even reduce or get rid of what they don't desire. The advantages of your product or service should be clearly communicated in your sales message.
What is a sales massage
A sale communication is a persuasion tactic used to persuade the recipient to act in a certain way (often make a purchase) in response to the value proposition the sender is making. The sales pitches used to persuade customers to buy products or use services are the ones we are most familiar with. A sale communication is a persuasion tactic used to persuade the recipient to act in a certain way (often make a purchase) in response to the value proposition the sender is making. The sales pitches used to persuade customers to buy products or use services are the ones we are most familiar with.
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with regard to environmental strategies, which is a holistic approach that represents a fundamental shift in the way a firm markets its products?
Sustainable marketing is a holistic approach that represents a fundamental shift in the way a firm markets its products.
What is Sustainable marketing?Sustainable marketing is the process of producing, disseminating, and providing value to customers while preserving or enhancing both natural (resources provided by nature) and human resources provided by people, capital.
For instance, a corporation might promote a product as being manufactured from recycled materials if clients appreciate its eco-friendliness.
A corporation may promote a product as being simple to use and time-saving if clients value the potential of the product to save them time.
Sustainable marketing is effective because it upholds the fundamental principles that your company and its stakeholders genuinely cherish, such as social justice, resource security, environmental wellness, and human health.
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What is the total interest on a 10-year 6. 1% loan with a principal of $32,000? (round monthly payment calculations to 2 decimal places. ).
For instance, the interest on a $30,000, three year credit at 6% is $2,856.The same loan—$30,000 at 6% interest rate—would cost $5,797 in interest over 72 months to repay.
How is the 6% loan interest calculated?
Divide 0.06 by 12 to get 0.005, which you would get if you made monthly payments and had an interest rate of 6%. To determine the amount of interest you will pay in that month, multiply that number by the balance on your remaining loan.The initial interest payment for a loan of $5,000 would be $25.
How do you determine my total interest payment?
To determine the total amount of interest you will pay over the course of your loan, simply divide the principal amount by the interest rate and the lending term in years.The interest on short-term personal loans is typically low.
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comey products has decided to acquire some new equipment having a $210,000 purchase price. the equipment will last 4 years and is in the macrs 3-year class. (the depreciation rates for year 1 through year 4 are equal to 0.3333, 0.4445, 0.1481, and 0.0741.) the firm can borrow at a 10% rate and pays a 25% federal-plus-state tax rate. comey is considering leasing the property but wishes to know the cost of borrowing that it should use when comparing purchasing to leasing and has hired you to answer this question. what is the correct answer to comey’s question? (hint: use the shortcut method to find the after-tax cost of the loan payments.) do not round intermediate calculations. round your answer to the nearest dollar.
The total amount of interest paid on the principal loan during the best period is typically used to calculate a company's cost of debt.The cost of debt is calculated by dividing that number by the total amount of debt and interest paid.
Debt costs after taxes are based on expenses incurred from interest earnings. We get it by dividing 1 by the effective tax rate first
What is the debt's carrying cost?The term "cost of carry" refers to expenses connected with an investment's carrying value. Financial costs like bond interest costs, margin account interest costs, investment loan interest, and any storage costs associated with holding a physical asset are examples of these costs.
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Tamika opened a money market account that has a 4. 25% annual interest rate, compounded annually. She deposits $1,750 into the account each year. How much interest will the account earn after 15 years?.
If Timika deposits $1,750 into the account each year, after 15 years she will earn interest of $9,449.4
The problem can be solved using the formula for the future value of an ordinary annuity.
FV = C x [(1 + i)ⁿ - 1]/i
Where
FV = future value
C = cash flow per period or annuity payment
i = interest rate per period
n = number of periods
Parameters given in the problem:
i = 4.25% = 0.0425
n = 15
C = 1,750
Plug these parameters into the formula:
FV = 1,750 x [(1 + 0.0425)¹⁵ - 1] / 0.0425
FV = 35,699.40
This future value consists of total deposit and interest
Total deposit = $1,750 x 15 = $26,250
Hence,
Interest = 35,699.40 - 26,250 = $9,449.4
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question content area treasury stock that was purchased for $2,383 is sold for $3,007. as a result of these two transactions combined,1) stockholders' equity will be increased by $3,5002) stockholders' equity will be increased by $5003) income will be increased by $5004) stockholders' equity will not change
Stockholders' equity will be increased by $500.
After all liabilities have been paid, a company's remaining assets are referred to as its stockholders' equity. This amount is calculated by deducting total liabilities from total assets, or alternatively, by adding share capital and retained earnings and deducting treasury stock.
The remaining assets that shareholders have access to after paying liabilities are known as stockholders' equity.
Outstanding shares, additional paid-in capital, retained earnings, and treasury stock is the four factors that are taken into account when calculating shareholders' equity. If a company's shareholders' equity is positive, it has enough assets to cover its liabilities; if it is negative, it has more liabilities than assets.
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a treasury strips is quoted at 67.181 and has 7 years until maturity. what is the yield to maturity?
The YTM for the treasury strips is 19.839%
YTM = { [ (100 / 67.181) ^1(2 *7)] -1}
YTM = { [ (1.4885) ^1(14)] -1}
YTM = 20.839-1
YTM = 19.839%
What is Yield to maturity?
The yield to maturity (YTM), book yield, or redemption yield of a bond or other fixed-interest security, such as treasury bonds, is an estimation of the total rate of return expected to be earned by an investor who purchases a bond at a specific market price, holds it until maturity, and gets all interest payments and the capital redemption on time. The discount rate at which the present value of all future cash flows from the bond (coupons and principal) equals the bond's current price is known as the internal rate of return (IRR, total interest rate).
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in which stage of rostow's five-stage model of economic growth do industrialized economies such as korea and the czech republic fit?
Industrialized economies, like Korea and the Czech Republic, fit into Rostow's five-stage model of economic development's (drive to maturity) stages. Their main emphasis is on producing a range of consumer and some industrial goods at a reasonable cost.
What is Rostow's five-stage model of economic development?Using these concepts, Rostow wrote the timeless Stages of Economic Growth in 1960, which outlined five stages that all nations must go through in order to develop: Traditional society is the first factor, followed by take-off conditions, take-off, drive to maturity, and age of high mass consumption. The Rostow model categorises the economic development of nations into five stages: Traditional society, characterised by hunter-gatherer or subsistence farming. the beginning of the manufacturing industry's development and the formation of a nation's global perspective are prerequisites for takeoff. His theory, which is based on the histories of the United States and Europe, views the American standard of high mass consumption as essential to the process by which all industrialized civilizations build their economies.
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Dolores used to work as a high school teacher for $40,000 per year but quit in order to start her own catering business. To invest in her factory, she withdrew $20,000 fromher savings, which paid 5 percent interest, and borrowed $30,000 from her uncle, whom she pays 4 percent interest per year. Last year she paid $25,000 for ingredients and had revenue of $60,000. She asked Louis the accountant and Greg the economist to calculate her profit for her.
Explicit cost- ?
Implicit cost-?
Accounting profit-?
Economic profit-?
After investment and borrowings Louis says her costs are $25,900, and Greg says her costs are $66,500.
A credit cycle outlines the stages of a borrower's access to credit. Initially, credit cycles have periods when borrowing money is very simple. These times are marked by lower interest rates, less lending criteria, and a growth in the amount of credit available, all of which encourage an overall expansion of economic activity.
Increase your potential returns by taking out a loan to buy investments. We refer to this as using leverage. You can profit as long as your investment grows faster than the cost of your borrowing. However, taking on debt entails higher risk than making a direct cash investment.
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naya is extremely competitive and seeks out personal and professional opportunities where she can compete and be declared a winner. according to allport, naya's competitiveness is a(n) trait.
According to Allport, Naya's competitiveness is a cardinal trait.
What is the Allport trait hypothesis?The Gordon Allport Trait Theory states that a person's personality is shaped by a combination of their fundamental traits. A person will have a variety of lesser traits instead of one dominant one; this is where the continuum of personality traits comes into play. One person might be more truthful than another.
What is the trait theory's central tenet?The foundation of trait theory in psychology is the notion that individuals differ from one another according to the strength and intensity of fundamental trait dimensions. Personality traits can be categorized according to the following three factors: consistency, stability, and individual differences.
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wilson farms' stock has a beta of .73 and an expected return of 9.0%. the risk-free rate is 1.9% and the market risk premium is 7.3%. this stock is because the capm return for the stock is %. group of answer choices undervalued; 7.53 overvalued; 7.23 undervalued; 7.23 undervalued; 7.46 overvalued; 7.53
This stock is undervalued because the CAPM return for the stock is 7.23% that is option B is correct.
The value of the stock can be calculated using the CAPM model which stands for Capital Asset Pricing model. The formula for calculating the CAPM expected return will be given as
R = Rₓ + (Rₐ - Rₓ)β
where Rₓ is the risk free rate, (Rₐ - Rₓ) is the market risk premium, β is the beta of investment and R is the CAPM expected return. Now, if we put the values then
R = 1.9% + 7.3% × 0.73
R = 1.9% + 5.33
R = 7.23%
Now, expected return is 9% and the CAPM expected return is 7.23% so this stock is undervalued.
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Complete Question:
wilson farms' stock has a beta of .73 and an expected return of 9.0%. the risk-free rate is 1.9% and the market risk premium is 7.3%. this stock is ________because the capm return for the stock is _____%. group of answer choices; 7.53 overvalued; 7.23 undervalued; 7.23overvalued; 7.53 undervalued
the statement of stockholders' equity reports multiple choice question. the revenues and expenses for the period. assets, liabilities, and owners' equity for the period. the changes to assets over the period. the changes in each equity account balance over time.
The statement of stockholders' equity reports the changes in each equity account balance over time. Hence, option (d) is the relevant option.
What is Stockholder equity?Shareholder equity, also known as shareholders' equity or owners' equity, is the amount of assets left over for shareholders to utilise after all liabilities have been settled. It can be calculated by adding a company's share capital and retained earnings and subtracting its treasury shares, or it can be calculated by subtraction of a company's total assets from its total liabilities. Shareholders' equity may consist of common stock, paid-in capital, retained earnings, and treasury stock, among other things. Conceptually, a company's stockholders' equity can be used to determine how much cash it has on hand. If this number is negative, a company might be in danger of going out of business, especially if there is a sizable debt obligation.
There are two main sources of shareholders' equity, which is also known as the company's book value. The money that was initially and subsequently invested in the business through share offerings is the first source. The company's retained profits, which are accumulated over time as a result of its operations, make up the second source. Retained earnings typically make up the greatest portion, especially when dealing with businesses that have been around for a while.
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suppose that russia produces 10,000,000 barrels of oil and 1,000 bushels of wheat each week. suppose that india produces 13045 barrels of oil and 13045 bushels of wheat each week. in autarky, what is the largest amount of wheat russia can consume every week?
1000 is the largest amount of wheat Russia can consume every week.
When nations do not trade with one another, each nation can only consume what it produces. A country that is autonomous is referred to as autarky. Countries that practice autarky is known for their independence and restricted trade with other countries.
A country that is fully autocratic would have a closed economy and no external sources of support, trade, or aid. However, in reality, no contemporary country has attained this level of autarky, even when subjected to harsh sanctions.
This is due to the difficulty of achieving true economic isolation due to the global supply chain, making any policy of autarky a matter of degrees rather than total isolation.
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what is an example of perceived obsolescence? a. needing to take your car to an auto repair shop b. selling a poorly made gadget that cannot be fixed c. staying up to date on fashion trends d. fixing a toaster when it's broken
Selling a poorly made gadget that cannot be fixed is an example of perceived obsolescence.
What is Perceived Obsolescence?
When someone is convinced to replace something before it has completely lost its utility, this is called perceived obsolescence. It may be as easy as the outdated object going out of style or losing its appeal.
Even when it is not, the outdated item is viewed as being so.
Usually, the item's appearance rather than its functionality contributes to its apparent obsolescence.
Industries like fashion and technology are rife with perceived obsolescence.
The goal of marketing is to persuade you to view their items as status symbols.
As a result, you are constantly forced to upgrade to the newest style or model much earlier than is necessary in order to keep up appearances.
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discuss the differences between the short run and the long run from the perspective of producers and from the perspective of consumers.
From the viewpoints of producers and consumers, respectively, there are some differences between the short run and the long run.
The long run is a time frame in which all aspects of production and cost are unknown. Long-term cost changes are possible for businesses, but short-term pricing changes can only be made by changing output levels.
Each of the LRAC curve's short-run average cost (SRAC) curves corresponds to a specific amount of fixed costs. The LRAC curve will therefore be the least expensive average cost curve for every output level. As long as the LRAC curve is dropping, internal economies of scale are being leveraged.
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