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.

Partnerships are the most common type of business firms in the world. t/f

At the end of the week, carla receives her paycheck and goes directly to the bank after work to make a deposit into her savings account. the bank keeps the required reserve and then loans out the remaining balance to a qualified borrower named malik as a portion of his small business loan. malik uses the loan to buy a tractor for his construction business and makes small monthly payments to the bank to payback the principal balance plus interest on the loan. the bank profits from a portion of the interest payment received and also passes some of the interest back to carla in the form of an interest payment to her savings account. in this example, the bank is acting

Eliminating entries (including goodwill impairment) and worksheets for various years on january 1, 2013, porter company purchased an 80% interest in the capital stock of salem company for$850,000. at that time, salem company had capital stock of $550,000 and retained earnings of $80,000.differences between the fair value and the book value of the identifiable assets of salem company were asfollows: fair value in excess of book valueequipment$130,000land65,000inventory40,000the book values of all other assets and liabilities of salem company were equal to their fair values onjanuary 1, 2013. the equipment had a remaining life of five years on january 1, 2013. the inventory was sold in2013.salem company’s net income and dividends declared in 2013 and 2014 were as follows: year 2013 net income of $100,000; dividends declared of $25,000year 2014 net income of $110,000; dividends declared of $35,000required: a.prepare a computation and allocation schedule for the difference between book value of equity acquired andthe value implied by the purchase price.b.present the eliminating/adjusting entries needed on the consolidated worksheet for the year endeddecember 31, 2013. (it is not necessary to prepare the worksheet.)lo6lo1