ANSWER 1 – Long-run average cost refers to per unit cost incurred by an organization in the production of a desired level of output when all the inputs are variable. The LRAC of an organization can be attained from its short-run average cost curves. Each SRAC curve represents the firm's short-run cost of production when different amounts of capital are used. The shape of the LRAC curve is similar to the SRAC curve while the U-shape of the LRAC is not due to increasing and later diminishing marginal. The -ve slope of the LRAC curve signifies economies of scale and increasing returns to scale.
It is obvious that the quality and persistence of earnings, are related and judged by the corresponding attributes of accruals. The later are measured by certain models widely used among the practitioners. The oldest one is that is used by Jones (1991). It is measuring nondiscretionary accruals and as a result also discretionary accruals that depend on the flexibility of management. As it is expected the lower the amount of nondiscretionary accruals, the higher the amount of discretionary accruals.
Market Economy is a Poor Choice for Developing Country to Stay Competitive Introduction Market economy is an economy system the individuals are owned and controlled most of the resources and are allocated through voluntary market transactions governed by the interaction of supply and demand. The presence of market economy will make a gap or disparity in society. It is happened because people are free to play in the market. In addition, there is no interference from the government and it will lead to the exploitation. It has lead to the market economy become not an option for a country to stay competitive.
Oligopoly, Monopoly and perfect competition are three market structures that exist in the market. Determination of price is one of the most crucial aspects of the market. Different market structures allows the company to determine different prices and output determination Monopoly: When one firm is the sole producer or seller of a particular product with no close substitute, monopoly is said to exist. In monopoly, there is single producer or seller creating monopoly in the market, hence the price and output is determined by the producer. Monopolistic competition: In monopolistic competition, many firms offer services and products that are similar.
The second case – controlling the market – is where the contrast between small firms and big business contrasts is most evident. The small firm lacks the capacity to influence prices, as both their market share and purchasing power are limited; however, big business possesses an abundance of both. Big business is able to exert their power by influencing prices because their decision to buy can be the difference between survival and failure for suppliers. Furthermore, Galbraith (1967, 30) suggests that the influence of size enables firms not only to control price but also quantity sold. Although Galbraith acknowledges that influence on demand is inexact; One should not discount its importance.
So if the supply of money will increase from Supply 1(Orange) to Supply 2(Grey), thus shifting equilibrium from point X to point Y. Demand remains the same, value goes down while quantity increases. This means that value of money is going down with a bigger
With this ratio we can easily compare the companies on inventory utilization. Major disadvantage of this ratio is that we cannot compare two firms from different industries. There is huge variation in the inventory holdings of different industries and organizations. For example in one industry inventory is held for longer time for operation while in other it is requiring only short duration. Safety Stock Stock that is held in excess of expected demand in Perfetti Van Melle is due to variable demand rate and/or lead time is known as safety stock.
However, how does this look graphically? If average costs are falling, marginal costs must be smaller, on the other hand if average costs are increasing then the marginal costs must be larger than the average costs. Therefore the marginal cost curve intersects the average cost curve from below, at its minimum (Lai et al., 2006), as seen above in figure 1.1. Firms strive to maximize profits and so choose their output (q) optimally given the factor and output prices. The equilibrium must lie on the upward sloping part of the marginal cost curve.
Cost Behavior: The understanding of cost behavior is fundamental to management accounting. The traditional idea of cost behavior is that costs can be treated as fixed or variable based on their relationship to volume or a related cost driver. In cost accounting literature, cost behavior can be classified into two, namely fixed costs and variable costs. Fixed costs are defined as the cost which does not entirely change when business activity increased or decreased, while the variable cost is the cost which the total proportionally increases towards the increase in activities and proportionally decreases towards the decrease in activities (Carter, 2009). Variable costs proportionally change by changing in driving activities; the magnitude of