Answer:
There is a shortage of the product.
Explanation:
The market demand curve is downward sloping indicating a negative relationship with price. While the market supply curve is upward sloping indicating a positive relationship with price.
At the market equilibrium, both demand and supply are equal. At a price below the equilibrium level, the market demand is greater than supply. This causes a shortage in the economy.
Answer:
A monopolistically competitive industry is characterized by
a. many firms selling products that are similar but not identical.
Explanation:
A monopolistic competition is a form of imperfect competition with many firms operating in the industry. For such an industry, the goods or services are differentiated, such that one firm's goods or services can easily be associated with the producer. This is mostly achieved through branding and the use of trademarks. Each firm, therefore, competes with many other competitors, but they limit their competition by differentiating their products so that consumers would have preference for one against the other, depending on their perceived value.
Answer:
a. 3.56%
b. 2.31%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,040
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 4% ÷ 2 = $20
NPER = 11 years × 2 = 22 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is = 2 × 1.78% = 3.56%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 3.56% × ( 1 - 0.35)
= 2.31%
Answer:
$18,594.10
Explanation:
Insurance company has to pay $10,000 for two year with rate of 5% since market rate remain same in both the bond.
X = PV (PMT, N, I/Y)
X = PV(10000, 2, 5)
X = 18594.1043
X = $18,594.10