Business, 13.11.2019 02:31 lalala1212

Assume that a six-firm cartel supplies 500 million units of whatailsya energy drink at a price of $5.00 per unit. each firm supplies an equal share of the cartel's output. one firm decides to cheat and supplies 50 million extra units, causing the price of whatailsya to decrease to $4.50 per unit. assuming that the loss due to the fall in price is evenly spread across all firms in the cartel, what is the net gain for the cheating firm, in millions of dollars? round your answer to the nearest million.

Answers: 2

Show answers

Answers

The income obtained from the sale of items is reduced from the amount spent on their acquisition and manufacturing to determine a company's net gain or loss. The terms "net losses" and "net gains" are frequently used to keep track of investment profits and losses.

COMPUTATION:

$\text{Share of each firm} = \frac{500}{7} \\\\ = 71.43 \text{million units}$

$\text{Initial revenue for each firm} = 71.43 \text{ x } 5 \\\\= $357.15 \text{million}$

$\text{Increased revenue of the cheating firm} = 71.43 + 50 \\\\= 121.43 \text{million units}$

$\text{Total revenue of the firm that cheated} = 121.43 \text{ x } 4.50 \\\\= $546.44 \text{million}$

$\text{Increase in revenue for the cheating firm} = 546.43 - 357.15 \\= 189.28 \text{million}$

$\text{Total Initial Industry revenue} = 500 \text{ x } 5 \\\\= $ 2500 \text{million}$

$\text{Decreased total Industry venue after cheating} = 550 \text{ x } 4.5 \\\\= $2475 \text{million}$

$\text{Amount of decreases in total revenue} = 2500 - 2475 \\\\= 25 \text{million}$

$\text{Amount of decreases in revenue of each firm} = \frac{25}{7}\\\\= 3.57 \text{million}$

$\text{Net revenue gain for the cheating firm} = 189.28 - 3.57 \\\\= 185.71 \text{ or,} 186 \text{million}$

For more information, refer to the link:

link

Answer from: ericahale3971

The net gain for the firm cheating the cartel is US$ 183 million (rounding the answer to the nearest million).

Explanation:

1. Let's review all the information provided for solving this case:

Number of firms that supply Whatailsya energy drink = 6

Amount of production of the cartel of six firms = 500 million units

Price of the energy drink = US$ 5

Amount of production of the firm that decided to break the cartel = 50 million extra units

Price after the extra production is sold = US$ 4.50

2. Let's find the individual production of each firm before and after the 50 million extra units and the net gains for the cheating firm.

Individual production of each firm of the cartel = Amount of production of the cartel/Number of firms

Individual production of each firm of the cartel = 500 million units/6

Individual production of each firm of the cartel = 83.33 million units

Individual sales of each firm before the 50 million extra units = Individual production * Price of the energy drink

Individual sales of each firm before the 50 million extra units = 83.333 million * 5

Individual sales revenue of each firm before the 50 million extra units = US$ 416.666 million

New production amount of the firm cheating the cartel = 83.333 + 50

New production amount of the firm cheating the cartel = 133.333 million units

Price of the energy drink after the extra production is sold = US$ 4.50

New sales revenue of the firm cheating the cartel = New production amount * Price of the energy drink after the extra production is sold

New sales revenue of the firm cheating the cartel = 133.333 million * 4.50

New sales revenue of the firm cheating the cartel = US$ 600 million

Net gain of the firm cheating the cartel = New sales revenue of the firm cheating the cartel - Individual sales of each firm before the 50 million extra units

Net gain of the firm cheating the cartel = 600 million - 416.666 million

Net gain of the firm cheating the cartel = 183.333 million

Net gain of the firm cheating the cartel = US$ 183 million (rounding the answer to the nearest million)

Answer from: Quest

answer; read and consider the content of the items;

Answer from: Quest

answer(d) the growth of consumption is likely to remain sluggish even as the economy begins to recover.;

Another question on Business

Business, 21.06.2019 13:20

How do you get a monthly budget spend down

Answers: 2

Answer

Business, 21.06.2019 20:30

Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and bondholders? a) compensating managers with stock options, b) financing risky projects with additional debt, c) the threat of hostile takeovers, d) the use of covenants in bond agreements that limit the firm's use of additional debt and constrain managers actions, e) abolishing the security and exchange commission

Answers: 1

Answer

Business, 21.06.2019 21:00

Arriving and delivering a load of company executives for a business meeting at a destination far from home base requiring an overnight stay, a company’s pilot requested approval from the company finance office to pay to either have the company’s jet brought into the fbo's hangar overnight to protect it from a forecast snowfall or to have it de-iced by the fbo the following morning well-before scheduled departure. the company was under considerable financial pressure at the time, and the pilot’s requests were denied because of the cost. so, early the following morning, the pilot was up on the wing of the jet sweeping off an accumulation of snow and ice with a borrowed push broom in preparation for the scheduled departure with the executives, but slipped and fell to the ground, suffering a broken neck. the business was organized as a limited partnership, owned by 3 limited partners and one general partner. as a cost-saving measure, the company had dropped its workers’ compensation insurance before the accident. analyze the potential liability for the pilot’s injuries of each of the following, showing your reasoning clearly: the company the general partner the limited partners analyze how the outcome would have been different, if the business had been organized as a corporation and observed all of the formalities to legitimize its corporate status. analyze how the outcome would have been different, if the pilot had been covered by workers’ compensation insurance.

Answers: 3

Answer

Business, 22.06.2019 22:00

Acontractor was awarded a purchase order for commercial items for $1.5 million under the authority of far subpart 13.5. the purchase order was issued in november 2010 and containedall applicable clauses that were current as of the date of the purchase order. under the purchase order, the contractor is required to comply with a small business subcontracting plan that contains all of the required elements. which of the following is true? a.the contractor must submit a standard form 294, subcontracting report for individual contracts. b.the contractor must submit an individual subcontracting report through the electronic subcontracting reporting system (esrs). c.the contractor may submit either an sf 294 or report its subcontracting through esrs. d.the contractor is not required to submit any subcontracting reports.

Answers: 1

Answer

You know the right answer?

Assume that a six-firm cartel supplies 500 million units of whatailsya energy drink at a price of $5...

Questions