This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose that a firm is currently earning revenues that are smaller than its total costs. The firm's ... (Read 158 times)

mp14

  • Hero Member
  • *****
  • Posts: 534
on: Jun 29, 2018
Suppose that a firm is currently earning revenues that are smaller than its total costs. The firm's managers are trying to decide whether or not the firm should shut down in the short run.
 
  On what information should the manager's decision be based?

Question 2

When the actual inflation rate turns out to be greater than the expected inflation rate, who gains  the borrower or the lender  and who loses? Explain why.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

jamesnevil303

  • Sr. Member
  • ****
  • Posts: 337
Reply #1 on: Jun 29, 2018
Answer to Question 1

The firm's decision should be solely based on whether its revenues from operating are sufficient to cover its variable costs. If they are, the firm should operate.

Answer to Question 2

The borrower gains because he pays back the loan in cheaper dollars  dollars that have lost more purchasing power than was expected. The lender loses because she receives dollars that have lost more purchasing power than was expected.


mp14

  • Member
  • Posts: 534
Reply 2 on: Jun 29, 2018
:D TYSM

anyusername12131

  • Member
  • Posts: 327
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

This year, an estimated 1.4 million Americans will have a new or recurrent heart attack.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

Did you know?

To combat osteoporosis, changes in lifestyle and diet are recommended. At-risk patients should include 1,200 to 1,500 mg of calcium daily either via dietary means or with supplements.

Illustration of an embolus floating in an artery. The embolus will become lodged in a blood vessel t Illustration of an embolus floating in an artery. The embolus will become lodged in a blood vessel t
4.1 Age changes in total IQ based on cross-sectional data (lower line) and longitudinal data ... 4.1 Age changes in total IQ based on cross-sectional data (lower line) and longitudinal data ...
Firm handshake Firm handshake
Management Information Systems: Managing the Digital Firm, 15th Edition Management Information Systems: Managing the Digital Firm, 15th Edition
Consider the production function ( ) 0.5 0.5 Y = AK L . Suppose both saving rate (s) and the ... Consider the production function ( ) 0.5 0.5 Y = AK L . Suppose both saving rate (s) and the ...
An educational institution has total direct labor and material costs of $1964 per student. Its ... An educational institution has total direct labor and material costs of $1964 per student. Its ...
Video: Carbohydrate digestion - mouth and stomach & pancreas and small intestine

For a complete list of videos, visit our video library