Acme Manufacturing is producing $4,020,000 worth of goods this year and expects to sell its entire production. It also is planning to purchase $1,500,000 in new equipment during the year. At the beginning of the year, the company has $500,000 in inventory in its warehouse. Find actual investment and planned investment if:Instructions: Enter your responses as whole numbers. Actual investmentPlanned investmenta. Acme actually sells $3,850,000 worth of goods.$ $ b. Acme actually sells $4,000,000 worth of goods.$ $ c. Acme actually sells $4,200,000 worth of goods.$ $ Assuming that Acme’s situation is similar to that of other firms, in which of these three cases is output equal to short-run equilibrium output?Case bCase cCase aNone

The investment consist of two components: new investments which is called net investment and net investment plus increase in the inventories which is called the gross investment. (*As per company policy we are supposed to answer only one question per session, sorry for the inconvenience) Planned investment Actual investment a. Acme actually sells $3,850,000 worth of goods. $ 1,500,000 $ 1,670,000 b. Acme actually sells $4,000,000 worth of goods. $ 1,500,000 $ 1,520,000 c. Acme actually sells $4,200,000 worth of goods. $ 1,500,000 $ 13,20,000 When the firm has unsold stock of goods at the end of working year, they are considered to be bought by the producer and thus increase the inventories held by the business and considered part of investment, thus actual investment equals the planned investment plus the part of unsold inventory or less the excess inventory sold.

Answered: Acme Manufacturing is producing…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Acme Manufacturing is producing $4,020,000 worth of goods this year and expects to sell its entire production. It also is planning to purchase $1,500,000 in new equipment during the year. At the beginning of the year, the company has $500,000 in inventory in its warehouse. Find actual investment and planned investment if:

Instructions: Enter your responses as whole numbers.

	Actual investment	Planned investment
a. Acme actually sells $3,850,000 worth of goods.	$	$
b. Acme actually sells $4,000,000 worth of goods.	$	$
c. Acme actually sells $4,200,000 worth of goods.	$	$

Assuming that Acme’s situation is similar to that of other firms, in which of these three cases is output equal to short-run equilibrium output?

Case b
Case c
Case a
None

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions