Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. This firm has fixed costs of $10 million per year and a variable cost of $1 per bag no matter how many bags are produced. LO5

a. If this firm kept on increasing its output level, would ATC per bag ever increase? Is this a decreasing-cost industry?
b. If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? At that price, what would be the size of the firm's profit orloss? Would the firm want to exit the industry?
c. You find out that if you set the price at $2 per bag, consumers will demand 10 million bags. How big will the firm’s profit or loss be at that price?
d. If consumers instead demanded 20 million bags at a price of $2 per bag, how big would the firm’s profit or loss be?
e. Suppose that demand is perfectly inelastic at 20 million: bags, so that consumers demand 20 million bags no matter what the price is. What price should you charge if you want the firm to earn only a fair rate of return? As­sume as always that TC includes a normal profit.

Prior to its closing, income summary had total debits of $1,190,500 and total credits of $1,476,300. what purpose is served by the income summary account and what is the nature of the entries that resulted in the $1,190,500 and the $1,476,300? the income summary account is used to the accounts. the $1,190,500 represents the , and the $1,476,300 represents . the company had of $ .

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?

En major recording acts are able to play at the stadium. if the average profit margin for a concert is $175,000, how much would the stadium clear for all of these events combined?