For a natural monopoly in which economies of scale are taking place at all output levels, which of the following is true?A It would need a subsidy, if regulated to follow marginal cost pricing.B It should be taxed, if regulated to follow average cost pricingIt would maximize total revenue rather than profits.It would produce the allocatively efficient output level, to maximize profit.DB) Its marginal cost exceeds its average total cost at all output levels.

The cost of producing extra units falls as production rises in a natural monopoly with economies of…

Answered: For a natural monopoly in which…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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As a purchasing manager for a manufacturer of domestic appliances you are to source the door seal for a new model of microwave oven. The component has caused problems in the past but the design problems have now been overcome. The market has been increasingly competitive and any problems with the new model could be disastrous. Preliminary sourcing indicates that permaseal Ltd has a substantially lower price than the other potential suppliers, including your current supplier Thermal bond Ltd. However, the last time you did business with permaseal was six years and at the time you experienced some quality and delivery problems. REQUIREMENT Explain in detail how you would undertake this sourcing exercise in order to ensure that you select the best possible supplier for the long term.
Considering the situation of potential firms making agreements with incumbents within the framework of the basic assumptions of Bain's limit pricing theory, comprehensively evaluate the necessary explanations and explain the concept of "market entry" according to Bain..
Food Cost Percentage. With an overall cost of goods totaling $64,000 and sales of $181,000, what is the food cost percentage?
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As a purchasing manager for a manufacturer of domestic appliances you are to source the door seal for a new model of microwave oven. the component has caused problems in the past but design problems have now been overcome. the market has been increasingly competitive and any problems with the new model could be disastrous. preliminary sourcing indicates that permaseal Limited has a substantially lower price than the other potential suppliers, including your current supplier Thermal Bond limited. however, the last time you did business with permaseal was six years and at the time you experience some quality and delivery problems. Explain in details how you would undertake this sourcing exercise in order to ensure that you select the best possible supplier for the long term.
b. If you were concerned about low income individuals having access to water, what type of pricing structure would you use in your municipality? Explain.
As a purchasing manager for a manufacturer of domestic appliances, you are to source the door seal for a new model of a microwave oven. The component has caused problems in the past but the design problems have now been overcome. The market has been competitive and any problems with the new model could be disastrous. Preliminary sourcing indicates that Permaseal Limited has a substantially lower price than the other suppliers, including your current supplier Thermalbond Limited. However, the last time you did business with Permaseal Limited was six years ago and at the time you experienced some quality and delivery problems. Required: Explain in detail how you would undertake this sourcing exercise in order to ensure that you select the best possible supplier for the long term.
As a buying manager for a household appliance manufacturer, you are to supply the door seal for a new microwave oven model. In the past, the component created difficulties, but the implementation problems were now solved. The industry becomes more and more dynamic and any issues with the latest paradigm might be catastrophic. Preliminary procurement shows that Permeaseal Ltd, like the new Thermalbond Ltd provider, is significantly cheaper than other prospective suppliers. The last time you did business with Permeal, though, was six years and you had several issues of demand and supply. Requirement Explain in depth how you can do this procurement exercise to ensure you choose the right provider on a long-term basis,
. How much profit will Neptune earn if it sells 30,000 units per month and agrees to pay its marketing manager a bonus of 30 cents for each unit sold above the break-even point from requirement 3?
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