mary ann and nana create a business plan to provide an overall road map of how to start the business and to attract/satisfy investors to secure a bank loan.
Why is it important to have a business plan ?A business plan outlines your company's goals and how it intends to get there. A business plan forces you to consider all facets of your enterprise. - If you want to get financing, you must have a strong business plan. A business plan aids in the dissemination of your ideas.
What element of a company plan is crucial?Undoubtedly, the most significant portion of the business plan is the executive summary. It must be well-written, succinct, and precise. Many readers of your business plan will determine whether to read more based purely on the executive summary.
What should a business strategy include?An executive summary, sections on products and services, marketing strategy and analysis, financial planning, and a budget should all be included in good business plans.
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Sabine's company produces personal floatation devices (life jackets). The long-run average total cost of producing 100 life jackets is $4, while the long-run average cost of producing 110 life jackets is also $4. Between production levels of 100 and 110 life jackets, sabine is experiencing:
Sabine is experiencing diminishing returns.
What is diminishing returns?The law of diminishing returns is a concept in economics that asserts, under the assumption that all other factors remain constant, that when investment in a certain sector increases, the profit rate from such an investment could no longer increase. Fixed costs, low demand, harm to workers, and decreased productivity all lead to diminished marginal returns.
Reduction alludes to a steady decrease in scope, magnitude, quantity, or intensity. diminish implies a decrease in size rather than a rise in population. decrease highlights a noticeable loss and suggests deducting it from a total. Reduce means a lowering or pulling down.
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an agent can be defined as a. a negotiator representing the interests of another party. b. parties on the same side that are working together and collectively advocating the same positions and interests. c. one or more parties that have de
An agent can be defined as a negotiator representing the interests of another party. The Option A is correct.
Who is an agent?Basically, an agent refers to someone that is given permission to act on an individual's behalf and may do so in a variety of capacities. This permission could include selling a home, executing a will, managing a sports career, managing an acting career, being a business representative etc.
An agents often have an expertise in a specific industry and are more knowledgeable about that industry's ins and outs than the average person. For example, a music agent can guide you through getting a record deal, signing record contracts, arranging your touring schedule etc.
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Metropolitan Symphony sells 200 season tickets for $50,000 that represents a five concert season. The amount of Unearned Ticket Revenue after the second concert is $20,000. True or False
True - Metropolitan Symphony sells 200 season tickets for $50,000 which represents a five-concert season. The amount of Unearned Ticket Revenue after the second concert is $20,000.
A metropolitan area or metro is a area that includes a densely populated city agglomeration and its surrounding territories sharing industries, commercial regions, shipping network, infrastructures and housing.[1][2] A metro place usually contains a couple of essential towns, jurisdictions and municipalities: neighborhoods, townships, boroughs, towns, cities, exurbs, suburbs, counties, districts, as well as even states and countries just like the eurodistricts. As social, financial and political institutions have changed, metropolitan areas have end up key monetary and political areas.
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TRUE/FALSE. because of the nontangible nature of a service, forecasting does not play as important a role in service operations as in manufacturing operations.
The statement is false. Forecasting is the prediction, projection or estimation of the occurrences of unsure future events or tiers of activity.
What is the reason of forecasting ?*To become aware of undiscovered patterns and set up hidden relationships, enabling organizations to make better evidence-based commercial enterprise selections and predictions. Use the true demand of the most current period, to forecast the demand of the following period.
Forecasting refers to the exercise of predicting what will happen in the future by taking into consideration events in the past and present. Basically, it is a decision-making device that helps businesses cope with the influence of the future's uncertainty via examining historic data and trends.
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the factors of stability that make up political risk unit of measure strength against shocks and shock themselves.
Political riskPolitical risk is the risk that investors, firms, and governments face when political actions, events, or situations have a major impact on a business actor's profitability or the projected value of a specific economic activity. Political risk may be understood and handled via careful planning and investment.
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holly, incorporated has a building that originally cost $445,000. holly expects to be able to sell the facility for $107,000 at the end of its useful life. the balance of the related accumulated depreciation account is $204,000. the depreciable cost of the facility is:
Consequently, $338,000 is the facility's depreciable cost. The cost of an asset that can be depreciated over time is its depreciable cost.
What is accumulated depreciation?A reduction in an asset's book value due to recognized life-to-date depreciation is referred to as accumulated depreciation. Alternatively, accelerated depreciation is a type of depreciation in which a greater amount of depreciation is recognized earlier in an asset's life. The amount of depreciation that has been taken into account as an expense on the income statement since the company acquired the asset until the balance sheet's date is represented on the balance sheet by the word "accumulated depreciation". The gross amount of the fixed asset is decreased by the accumulated depreciation, which is recorded in a counter asset account, which has a credit balance. Since it is not an asset or liability, it is not documented.
What kind of asset is accumulated depreciation?Accumulated depreciation is the total amount of depreciation costs associated with a specific asset since the asset first came into use. It is a contra-asset account, meaning it has a negative balance that cancels out the balance in the asset account it usually goes with.
Briefing:Depreciable Cost = Cost - Residual Value
Depreciable Cost = $445,000 - $107,000
Depreciable Cost = $338,000
Consequently, the facility's depreciable cost is $338,000. An asset's depreciable cost is its purchase price when it can be depreciated over time.
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what is the total stockholders' equity based on the following account balances? line item description amount common stock $375,000 paid-in capital in excess of par 90,000 retained earnings 190,000 treasury stock 15,000 a.$640,000
$640,000 is the total stockholders' equity based on the following account balances.
stockholdersA stockholder is a corporation shareholder or a person who owns at least one share of an organization's capital stock. Stockholders are the majority of the company's owners, and they often obtain the company's success in the form of increasing stock worth. Stockholders have classified into two types: Equity shareholders are the company's true owners and members, with voting rights and control over its operations. After paying the preferred stockholder, dividend payments are made to equity shareholders.
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the efficient scale of the firm is the quantity of output that a. minimizes average total cost. b. maximizes profit. c. maximizes marginal product. d. minimizes average variable cost.
Out of the choices provided above, it can be concluded to state that the efficient scale is quantity of output that minimizes the average total costs of the firm. Therefore, the option A holds true.
The average total costs can be referred to or considered as the summation of all the costs incurred by a producer in the process of production of its goods and/or services. It is the aggregate of the fixed costs as well as the variable costs of the firm, which show the efficiency of the firm during a given particular period.
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The Marchetti Soup Company entered into the following transactions during June:(1) purchased inventory on account for $165,000 (assume Marchetti uses a perpetual inventory system);(2) paid $40,000 in salaries to employees for work performed during the month;(3) sold merchandise that cost $120,000 to credit customers for $200,000;(4) collected $180,000 in cash from credit customers, and(5) paid suppliers of inventory $145,000.Post the above transactions to the below T-accounts. Assume that the opening balances in each of the accounts are zero except for cash, accounts receivable, and accounts payable that had opening balances of $65,000, $43,000, and $22,000, respectively.PLEASE USE T-ACCOUNT FORMAT WITH THESE TWO COLOUMNSCASH ACCOUNTS RECEIVABLEINVENTORY ACCOUNTS PAYABLESALES REVENUE COST OF GOODS SOLDSALARIES EXPENSE
A cash transaction can be defined in a variety of ways. In essence, it's a quick cash payment made to customer in return for something.
Transaction Account Title Debit Credit
1) purchased inventory on account for $165,000 (assume Marchetti uses a perpetual inventory system)
Inventory 165,000
Accounts payable 165,000
2) paid $40,000 in salaries to employees for work performed during the month
Salaries expense 40,000
Cash 40,000
3) sold merchandise that cost $120,000 to credit customers for $200,000
Accounts receivable 200,000
Sales 200,000
Cost of merchandise sold 120,000
Inventory 120,000
4) collected $180,000 in cash from credit customers, and
Cash 180,000
Accounts receivable 180,000
5) paid suppliers of inventory $145,000
Accounts payable 145,000
Cash 145,000
A monetary transaction can be defined in a variety of ways. In essence, it's a quick cash payment made in return for something. Market stock transactions may fall under the definition of cash transactions in some cases since they occur almost quickly in the marketplace at the current price.
Even though the trade may not settle for a few days, it is nonetheless conducted and the parties involved exchange money for shares
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the materials requirement plan (mrp) is a long-range materials plan that converts information regarding end-items in the mps into a set of time-phased component and part requirements
A macro-level, long-term planning tool is resource needs planning (RRP). A long-range materials plan called the materials requirement plan (MRP) transforms information from the MPS's end-item list into a list of time-phased component and part requirements.
The materials requirement plan (mrp) is a long-range materials plan that converts information regarding end-items in the mps into a set of time-phased component and part requirements
What is materials requirement plan?
A technique called MRP is used to schedule manufacturing production. With the aim of satisfying customer needs and boosting overall productivity, it recognizes necessary materials, estimates amounts, predicts when items will be required to match the production plan, and manages supply scheduling.
The three fundamental inputs of an MRP system (BOM)
Master Production Schedule (MPS),
Inventory Status File (ISF), and
Bill of Materials (BOM)
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on january 1, 2025, blossom corporation issued $810,000, 7%, 10-year bonds at face value. interest is payable annually on january 1. blossom corporation has a calandar year-end. prepare all entries related to the bond issue for 2025
The official record of every company activity is a journal entry. A transaction is, in the broadest sense, any financial activity that has an impact on the firm.
Date Account Titles and Explanation Debit Credit
2020
Jan. 1
Cash $730,000
Bonds Payable $730,000
(To record the issue of bonds payable)
Dec. 31
Interest Expense $43,800 ($730,000 x 6%)
Interest Payable $43,800
(To record interest expenses)
The official record of every company activity is a journal entry. A transaction is, in the broadest sense, any financial activity that has an impact on the firm.
They encompass all exchanges involving the movement of money, including interest payments, depreciation, costs, and payroll. They encompass more than just the exchange of goods and services. Instead of being processed automatically like invoices or cash receipts are, general journal entries are manually entered into the general ledger.
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McFriendly Software recently developed new spreadsheet software, Easy-Calc, which it intends to market by mail through ads in computer magazines. Just prior to introducing Easy-Calc, McFriendly receives an unexpected offer from Jupiter Computer to buy all rights to the software for $10 million cash.
Instructions
a. Is the $10 million offer "relevant" financial information?
b. Describe McFriendly's opportunity cost if (1) accepts Jupiter's offer and (2) turns down the offer and markets Easy-Calc itself. Would these opportunity costs be recorded in McFriendly's accounting records? If so, explain the journal entry to record these costs.
c. Briefly describe the extent to which the dollar amounts of the two opportunity costs described in part b are known to management at the time the decision is made to accept or reject Jupiter's offer.
d. Might there be any other opportunity costs to consider at the time of making this decision? If so, explain briefly
Yes, the $10 million offer is pertinent financial information because it represents the opportunity cost the company would incur if it chose to market the product internally.
Opportunity Cost
Opportunity Cost is defined as the benefit that would have been attained if a different course of action had been taken.
Example: Need to decide between chocolate and vanilla ice cream. Choose chocolate
The opportunity cost is the pleasure you would have experienced from vanilla ice cream.
Out-of-Pocket-Costs
Define the costs that have not yet occurred and that could differ depending on the possible courses of action.
In our instance: advertising expenses
McFriendly will have to pay for advertisements if they decline the offer.
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henderson company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. inventory on hand at the end of july was $120,500. the following information for the month of august was available from company records: purchases $ 215,000 freight-in 4,800 sales 346,000 sales returns 8,600 purchases returns 3,900 in addition, the controller is aware of $12,000 of inventory that was stolen during august from one of the company’s warehouses. required: calculate the estimated inventory at the end of august, assuming a gross profit ratio of 25%. calculate the estimated inventory at the end of august, assuming a markup on cost of 25%.
Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 30%: It is $93,700. Calculate the estimated inventory at the end of August, assuming a markup on the cost of 25%. It is $69,600.
What is the estimated inventory?The gross profit approach uses current-period data on net sales and the cost of products available for sale along with the company's business gross profit percentage to estimate the value of estimated inventory. Net sales minus cost of goods sold = gross profit.
The basic formula is that ending estimated inventory equals beginning inventory + net purchases with fewer COGS. The ending inventory of the previous period is your starting inventory. The products you have purchased but also added to your stock count are the net purchases.
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which of the following is an appropriate responsibility of the board? performing a review of the procurement function of the organization. reviewing the internal audit activity’s engagement work schedule submitted by the chief audit executive. recommending the assignment of specific internal audit staff members for specific engagements. reviewing the engagement records of the public accounting firm to determine the firm’s competence.
It is the Board's reasonable responsibility to review the delegated work plan for internal audit activities submitted by the Chief Audit Officer.
The board acts on behalf of the shareholders make general policy decisions and provide oversight. The board has a duty of loyalty to shareholders. In other words, the board has financial and other responsibilities for keeping the company running efficiently so that shareholders do not suffer losses.
The duties of the Board are to establish a governance framework, including a compliance framework, to ensure that the organization meets its obligations. It sets the strategic direction that helps the organization achieve its objectives. Monitor your organization's financial performance.
The Chief Audit Officer's role is to monitor and review the adequacy, effectiveness, and correct functioning of the internal control system.
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janeen hears a rumor from a colleague in sales that there is going to be layoffs on friday afternoon. she quickly calls her friend in accounting to let her know. this is an example of .
Janeen hears a rumor from a colleague in sales that there's progressing to be layoffs on Friday afternoon. she quickly calls her friend in accounting to let her understand. this can be an example of the grapevine.
What is accounting?
⇒ The measure, processing, and sharing of economic and non-financial info concerning economic entities like enterprises and firms is thought as accounting, conjointly called business. The results of an organization's economic activities are measured through accounting, that has been named because the "language of business," and this info is shared with a spread of stakeholders, as well as investors, creditors, managers, and regulators. Accountants are people who observe accounting. Accounting and monetary reportage are ofttimes used interchangeably.
Financial accounting, management accounting, tax accounting, and value accounting are a number of the many subfields of accounting. The reportage of economic info regarding a corporation, as well as the creation of economic statements, to external users of the knowledge, like investors, regulators, and suppliers, is that the focus of economic accounting, whereas the main target of management accounting is on the activity.
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of the three financial ratios discussed in this chapter, which do you think is the most important financial ratio? why?
Return on equity, Because it serves as a gauge of a company's success in generating profits for its stockholders.
What is meant by financial ratio?A financial ratio, also known as an accounting ratio, is the difference in magnitude between two specific numbers obtained from the financial accounts of an organization. There are numerous standard ratios that are frequently used in accounting to assess the overall financial health of a firm or other entity.
What does return on equity mean?The company's ability to generate returns on the investments it has received from its shareholders is measured by its return on equity. Description: Return on Equity is calculated mathematically as Net Income or Profits/Equity. Shareholder's The difference between a company's assets and liabilities is effectively the denominator.
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as the official is bouncing the ball to thrower-in a-1, b-1 requests a time-out. official denies the request, stating when they release the ball to the thrower -in then team a now has team control. is the official correct?
No, the official is not correct in denying request, stating when they release ball to thrower.
Who is an official?An official is someone who participates in the exercise of authority (either their own or that of one‘s superior and/or employer, public or legally private), holds an office (function or mandate, regardless of whether it comes with an actual working space) within a company, government, or other organization. A person who has been elected into office is said to be an elected official. Ex officio appointments are another option for officials (by virtue of another office, often in a specified capacity, such as presiding, advisory, secretary). It's possible to inherit some government posts. An incumbent is a person who is currently in a position of authority. As in official language, official gazette, or official scorer, "official" indicates to something that has received acknowledgment from the government or another authorized body.
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the concept of identifying customer needs; understanding and influencing customer behavior through ongoing communication strategies in an effort to acquire, retain, and satisfy the customer is known as
'The concept of identifying customer needs; understanding and influencing customer behavior through ongoing communication strategies in an effort to acquire, retain, and satisfy the customer is known as customer relationship management.
Customer relationship management is the process by which a company or other organization manages its interactions with customers, typically using data analytics to go through large amounts of information.
Customer Relationship Management (CRM) is the technology for managing all relationships and interactions between a business and its customers and prospects. Our goal is simple. to improve business relations. CRM systems help businesses stay connected with customers, streamline processes, and improve profitability.
Customer Relationship Management (CRM) is the combination of practices, strategies, and technologies companies use to manage and analyze customer interactions and data throughout the customer lifecycle. The goal is to improve customer service relationships, support customer retention, and drive revenue growth.
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A hiking boot’s profits are declining because new competition has entered the market, but its cost has also declined due to increased volume of production. What stage of the product development life cycle is the hiking boot in?.
A hiking boot’s profits are declining because new competition has entered the market, but its cost has also declined due to increased volume of production. Maturity stage of the product development life cycle is the hiking boot in.
What exactly does "maturity stage" mean?Sales start to level off from the phase of rapid expansion when they reach the mature stage. In order to remain competitive in the face of the escalating competition, businesses now start to lower their pricing.
What happens at maturity?The amount of time until a bond's owner receives interest payments is known as the bond's term to maturity. The face value, or par value, of the bond is paid to the owner when it matures. If the bond has a put or call option, the term till maturity may change.
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hyperion enterprises had asset turnover of .40 in 2022. if net assets were $678,000 at the beginning of the year and $895,000 at the end of the year, what were net sales for 2022? $217,000
Average assets are equal to (Begging assets + Ending assets) / 2. Average Assets = (678000 + 895000) /2 = 786500
Net sales are equal to Average Assets times Asset Turnover.
Net sales equals 0.40 x 786.500 = 314,600.
What does a favourable asset turnover ratio look like?Finally, it is selling for a significant percentage of its total asset worth. Depending on the company model, a number between 0.25 and 0.5 is considered to be favourable for enterprises.
What does the total asset turnover ratio mean?According to one interpretation of the asset turnover ratio, the ratio gauges how well a business utilises its assets to generate sales. A larger ratio is preferable since it shows that assets are being used more effectively. A lower ratio, on the other hand, shows that the organisation is not utilising its resources as effectively.
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question content areamanagers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit? a.production center b.cost center c.profit center d.investment center
Investment center is the type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit.
An investment center differs from a cost or profit center in that the latter is measured against the amount of capital used, whereas the former is measured against the amount of raw costs or profits.
A profit center is a division that is in charge of both costs and revenues. An investment center is a division in charge of costs, revenues, and asset investment. The performance measures used to evaluate managers differ depending on the type of responsibility center in question.
Hence, the correct answer "D".
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x-1 corp's total assets at the end of last year were $460,000 and its ebit was $52,500. what was its basic earning power (bep) ratio? x-1 corp's total assets at the end of last year were $460,000 and its ebit was $52,500. what was its basic earning power (bep) ratio? 14.27% 9.24% 12.33% 11.07% 11.41%
For the conditions given above, it can be concluded to state that the Basic Earning Power, or the BEP ratio of the company will be 11.41 percent when it has total assets of $460,000 and its EBIT amount to a total of $52,500. Therefore, the option E holds true.
The computation of the Basic Earning Power of the company can be done using the generalized formula and the information given above, as below,
Basic Earning Power = EBIT / Total Assets
Basic Earning Power = 52500 / 460000
Basic Earning Power = 0.1141
Therefore, the BEP ratio of the company will be 11.41 percent.
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Employees of cnn saw military boats around d. C. And people said they heard gunfire. Cnn reported military action; however, there was no gunfire and the coast guard merely was training. The next day, newspapers reported the miscommunication and helped clarify the confusion. This illustrates which advantage of written communication?.
When the newspapers report about the miscommunication, it can be identified as accuracy, which is sought as an advantage of written communication techniques.
Written communication can be referred to or considered as the form of communication, which is done through writing or printing as a form of exchange of messages between at least two parties. There are various merits as well as disadvantages of written communication. One of the advantages is the accuracy of the information being presented by either of the parties.
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What are two current rising or resurgent powers that the video mentions that may be planning on changing the established international system?.
China and Russia are two current rising or resurgent powers that the video mentions that may be planning on changing the established international system.
Is China a comfortable place to live?Over the past 40 years, China has rescued more people from poverty (800 million and counting) than any other country in history. China has a greater quality of living than the majority of other countries, including the West. In China, everyone has a beautiful life that keeps becoming better.
Is China a socialist or communist country?The socialist market economy (SME) is the economic system and model for economic growth used by the People's Republic of China. The system is a market economy, with a predominance of public ownership and state-owned enterprises.
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the shift from manufacturing to service in the u.s. economy has caused the number of union workers to:
US manufacturing companies have moved their operations to China and other low-wage countries while firing US union workers, resulting in a decline in union membership over the past three decades.
What caused the rise in union membership?
The need to safeguard workers' collective interests led to the birth of the labor movement in the United States.Organized labor unions fought for better wages, reasonable working hours, and safer working conditions for industrial workers.
Which three factors are responsible for the decline in union membership?
The growth of traditionally unionized industries has significantly decreased.Numerous factors, including unions' tarnished reputations, shifts in the labor force, and laws restricting union influence, are to blame for the decline in unionization.
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perpetualcold refrigeration company (prc) can borrow funds at an interest rate of 9.70% for a period of eight years. its marginal federal-plus-state tax rate is 25%. prc’s after-tax cost of debt is
The after tax cost of debt of perpetual cold refrigeration company will be 7.275% or 7.28 %.
What is after tax cost of debt?Before understanding the after tax cost of debt one must know about the cost of debt. Cost of debt is an interest cost or expected amount of return on debt instrument that an investor will earn after sacrificing the debt fund for predefined period of time.
The after tax cost of debt is referred to a rate of interest computed after eliminating the effect of corporate tax on debt return.
Formula for Post tax cost of Debt (kd) = Debt Interest × (1 - t) where is t is a tax rate. 9.70% (1-0.25) = 7.28%
Therefore the marginal federal-plus-state tax rate is 25% then post tax Kd will after removing the tax benefit on trading in equity to know the weighted average cost of capital.
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. suppose you wanted to lock in an interest rate for an investment that begins in one year and matures in five years. what rate would you obtain if there are no arbitrage opportunities?
Let's take a look at a 5% corporate bond with five years until maturity and the usual semi-annual coupon payments. The bond currently yields 3% each year (or 1.5% every other year, if compounding effects are ignored to keep things simple). The bond costs $109.22, which is also its present value.
On an Excel spreadsheet, the PV function can be used to quickly compute the present value, as
=PV(1.5%,10,-2.50,-100). Alternatively, enter i=1.5%, n=10, PMT=-2.5, FV=-100 into a financial calculator.
After that, an arbitrager would sell the bond to Trader Tom for $105, while concurrently purchasing it elsewhere for $104.49, earning $0.51 in risk-free profit for every $100 of principle. The chance for an arbitrage would vanish shortly either because Trader Tom would realise his mistake and re-price the bond yield at 4%.
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One year ago, Ernie purchased shares of RTF common stock for $100 a share. Today the stock paid a dividend of $1 per share. If the stock currently sells for $114 per share, what is Ernie's total return?
Ernie's total return per share is ($114-100+1)/100=15% is the dividend is $1.
What is dividend?A dividend is the distribution of profits by a firm to its shareholders. When a corporation earns a profit or surplus, it can pay a portion of its profit to shareholders as a dividend. Any residual monies are confiscated and reinvested back into the business. A dividend is the distribution of profits by a firm to its shareholders. When a corporation earns a profit or surplus, it can pay a portion of its profit to shareholders as a dividend. Any residual money are withdrawn as well as reinvested in the business. A dividend is a gift given by a company to its shareholders, which can be cash or something else.
Hence, Ernie's total return per share is ($114-100+1)/100=15% is the dividend is $1.
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stock splits for the company in problem 2, show how the equity accounts will change if a. the company declares a 4 - for - 1 stock split. how many shares are outstanding now? what is the new par value per share? b. the company declares a -for-5 reverse stock split. how many shares are outstanding now? what is the new par value per share?
Stock splits are a strategy by firms to increase the liquidity of their shares especially when they are trading at a high price.
The firm divides the stock by a certain number thus increasing the number of shares by the multiple of the number. This action will divide the price of the stock and thus allow for more trade as they are cheaper.
A 4-for- stock split means that each share will become 4.
Your total number of share will become;
= 4 * 3,600
= 14,400 shares
The new price will be;
= 68/4
= $17 per share
A stock split can be understood in most common language as an allotment of outstanding shares based on an increase in the price of those shares. This stock split is done by the company's board of directors to increase the number of shares. The most important reason is to make the shares affordable to investors and not affect the company's capital. A stock split is usually an increase in the price per share of his in a company, when it is determined that the price exceeds the company's estimated limit or is high compared to other similar companies in the same market.
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suppose that the government decides to regulate this natural monopolist by requiring the firm to charge a price of p2. which is true if the government takes this approach? a socially optimal quantity of the good will result. the firm will earn a higher profit because it is selling a larger quantity. consumer surplus will increase. the firm will earn a negative economic profit.
If the government decides to regulate this natural monopolist by requiring the firm to charge a price of p2 it will result in consumer surplus will increase.
Government is the system or group of people that run an organized community, usually a state. In the case of its broad association definition, government usually includes the legislative, executive, and judicial branches.
Government is the vehicle by which an organization's policies are enforced, as well as a mechanism for policy determination. In many countries, government has some sort of constitution, which states its guiding principles and philosophy. The main types of political systems in the modern era are democracy, monarchy, and authoritarian and totalitarian regimes.
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