Answer:
C. Product was stolen from the store
Explanation:
Given that inventory, shrinkage is a situation that happens when the number of commodities in stock is lesser than the amount documented on the inventory record. This is usually caused by clerical errors, spoilt goods, or theft.
Hence, in this case, the common events that could result in inventory shrinkage are "Product was stolen from the store."
Explain why monopolies do exist?
Answer:
When one company exerts sole control over a resource that is necessary for the production of a specific product, the market may become a monopoly.
Explanation:
This is because you can control companies if you are the only place available for a resource for example water in dry contents
Assume that the labor market for retail workers is generally unskilled. If a minimum wage is set in the labor market for retail workers and that this minimum wage is above the equilibrium wage in this particular labor market, then __________ . Select the correct answer below: there will be a shortage of retail workers in this labor market there will be a surplus of retail workers in this labor market. there will be a non-binding price floor there will be a non-effective minimum wage
Answer:
there will be a surplus of retail workers in this labor market.
Explanation:
In the attached diagram the scenario is illustrated.
When the minimum wage is above the equilibrium wage it means that the minimum wage is above what employees are willing to pay workers. So employees will be less wiling to pay this amount.
There will be a reduction in the number of available slots for workers.
On the other hand workers will receive higher wage than they expected but since the slots for work are now limited there will be a surplus of labour in the market
Colquhoun International purchases a warehouse for $311,000. The best estimate of the salvage value at the time of purchase was $16,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years.
Required:
a. Calculate annual depreciation expense for the first four years.
b. Determine the depreciation expense for the final fifteen years of the asset’s life.
Answer:
a. $11,800
b. $16,520
Explanation:
Depreciation expense using straight line method is calculeted as :
Deprecation expense = (Cost - Salvage Value) ÷ Estimated useful life
therefore,
Annual depreciation expense for the first four years.
Deprecation expense = ($311,000 - $16,000) ÷ 25 = $11,800
The depreciation expense for the final fifteen years of the asset’s life.
Depreciable Amount = Cost - Salvage Value - Accumulated depreciation
= $311,000 - $16,000 - ($11,800 x 4)
= $247,800
Deprecation expense = $247,800 ÷ 15 = $16,520
Portions of the financial statements for Myriad Products are provided below.
MYRIAD PRODUCTS COMPANY
Income Statement
For the Year Ended December 31, 2016
($ in millions)
Sales $ 620
Cost of goods sold (217)
Gross margin 403
Salaries expense $ 85
Depreciation expense 72
Patent amortization expense 5
Interest expense 12
Loss on sale of land 3 (177)
Income before taxes 226
Income tax expense (113)
Net Income $ 113
MYRIAD PRODUCTS COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2016 and 2015
($ in millions)
Year
2016 2015 Change
Cash $ 108 $ 104 $ 4
Accounts receivable 224 238 (14 )
Inventory 442 454 (12 )
Accounts payable 150 142 8
Salaries payable 82 90 (8)
Interest payable 31 24 7
Income taxes payable 21 14 7
Required:
Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Company using the indirect method. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10.). Amounts to be deducted should be indicated with a minus sign.)
Answer:
MYRIAD PRODUCTS COMPANY
Cash flow from Operating Activities
($ in millions)
Net Income $ 113
Adjustment of non-cash items :
Depreciation expense $72
Patent amortization expense $5
Loss on sale of land $3
Adjustment to Changes in Working Capital :
Decrease in Accounts receivable $14
Decrease in Inventory $12
Increase in Accounts payable $8
Decrease in Salaries payable ($8)
Increase in Interest payable $7
Increase in Income taxes payable $7
Net Cash Provided by Operating Activities $219
Explanation:
The Indirect method reconciles the Net Income and Operating Cash flow by adjusting for non- cash items and changes in working capital during the year.
At the beginning of the year, Infodeo established its predetermined overhead rate for movies produced during the year by using the following cost predictions: overhead costs, $1,872,000,and direct labor costs, $480,000. At year-end, the company’s records show that actual overhead costs for the year are $1,369,300. Actual direct labor cost had been assigned to jobs as follows:
Movies completed and released $300,000
Movies still in production 54,000
Total actual direct labor cost $354,000
Required:
a. Determine the predetermined overhead rate for the year.
b. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
Answer:
Part a.
$3.90 per direct labor cost
Part b.
Debit : Overheads $11,300
Credit : Cost of Sales $11,300
Explanation:
The predetermined overhead rate for the year.
predetermined overhead rate = Budgeted Overheads ÷ Budgeted Activities
therefore,
Predetermined overhead rate = $1,872,000 ÷ $480,000
= $3.90 per direct labor cost
The adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
Step 1 : Overheads Applied Calculation
Overheads Applied = Predetermined overhead rate x actual labor costs
therefore,
Overheads Applied = $3.90 x $354,000 = $1,380,600
Step 2 : Over or Under Application of Overheads
Actual Overheads = $1,369,300
and
Overheads Applied = $1,380,600
therefore,
Over-applied overheads = $1,380,600 - $1,369,300 = $11,300
Step 3 : Journal entry
Reduce the cost of sales figure by the amount of Over-applied overheads
Debit : Overheads $11,300
Credit : Cost of Sales $11,300
Which of the following occurred during the credit crisis? Check all that apply. Some large securities firms were either acquired by commercial banks or converted into bank holding companies. The Federal Reserve intervened to help securities firms in an attempt to reduce the adverse effects caused by systemic risk. Securities firms experienced financial problems due to their low degree of financial leverage. Many commercial banks were forced to convert to securities firms.
Answer:
The Federal Reserve intervened to help securities firms in an attempt to reduce the adverse effects caused by systemic risk.
Some large securities firms were either acquired by commercial banks or converted into bank holding companies.
Explanation:
The above statements arise during the credit crisis period as the federal reserve would bailed out the huge number of securities at the time of the credit crisis Also som big securities firms would be either purchased by the commercial bank or they are transform into the bank holding companies such as bank of America merrill lynch so that they prevent and save the securities firms
Hence, the above statements represent the same
All of the following are examples of current account transactions EXCEPT: Elimination Tool Select one answer A The United States purchases 200 tons of Canadian bacon. B Argentina purchases 10,000 French berets. C Mexico purchases 500 Spanish matador outfits. D Germany pays 1 million euro for the services of Swiss accountants. E China purchases $10 billion of United States government securities.
Answer:
E
Explanation:
the current account of a country measures the value of the trade balance, transfers and the net income
the component of the current account includes
trade balance - it measures the value of the import and export of goods and services of a country.
net income - measures the value of the income received by a country's residents less the income paid to foreigners
transfers - it includes income sent home by a country's citizens working outside the country
Asset income - measures changes in the asset income
this transaction - China purchases $10 billion of United States government securities - would be included in the capital account
3
Hame and explain
of skills that should be possess by an entrepreneur
Answer:
1. Curiosity. Great entrepreneurs are tasked with identifying new problems, identifying potential niche opportunities, refactoring their existing business processes, and innovating. This necessitates a passion for various fields of study and business cases that are outside of one's comfort zone.
2. Time management. Prioritization, milestone definition, execution, and iteration are all critical. None of this would be possible without the proper project management and time allocation methodologies in place to complete the work.
3. Strategic thinking. Learning to break down a problem to its simplest components and identify growth opportunities. Inventive problem-solving and spotting the low-hanging fruit. Defining an MVP's scope and testing concepts in a short amount of time and on a tight budget.
Renaissance Creations restores antique stained glass windows. All jobs generate some breakage or improper cuts. This scrap can be sold to stained glass hobbyists. Renaissance Creations expects to incur approximately 45,000 direct labor hours during 2013. The following estimates are made in setting the predetermined overhead rate for 2013:
One job that Renaissance Creations completed during 2013 was a stained glass window of the Pierce family crest that took 125 hours, and direct labor is invoiced at $20 per hour. Total direct material cost for the job was $890. Scrap that was generated from this job was sold for $93.
a. What was the predetermined overhead rate (set on the basis of direct labor hours) for 2013?
b. What was the cost of the Pierce stained glass window?
c. Prepare the journal entry to record the sales value of the scrap from the Pierce stained glass window.
d. Assume instead that only certain jobs generate scrap. What was the cost of the Pierce stained glass window?
Answer:
hello your question has some missing information attached below is the missing information
answer :
a) $7
b) $4265
c) attached below
d) $4192
Explanation:
a) determine the predetermined overhead rate
= Total estimated overhead / estimated direct labor hour
Total estimated overhead = $315,000
estimated direct labor hour = 45,000
hence predetermined overhead rate = 315,000 / 45,000 = $7
b) calculate the cost of the Pierce stained glass window
Direct material cost = $890
number of labor hours = 125
direct labor cost = $20 per hour
predetermined overhead rate = $7
∴cost of glass window = [ ( 890 + ( 125 * 20 ) + ( 125 * 7 ) ] = $4265
c) Journal entry used to record sell of scrap
Account name
cash $93
manufacture overhead $93
d) assuming only some jobs generate scrap
first we will calculate the overhead rate per hour
= ( $297000 + $25200) / 45,000 = $7.16
∴ Total cost of pierce stained glass window
= [ (direct material cost + number of labor hours ) + number of labor hours ( predetermined overhead rate ) ] - $93
= $4285 - $93 = $4192
The corporate charter of Concord Corporation allows the issuance of a maximum of 4,300,000 shares of $1 par value common stock. During its first three years of operation, Michael issued 2,060,000 shares at $15 per share. It later acquired 88,000 of these shares as treasury stock for $25 per share. Based on the above information, answer the following questions:
a. How many shares were authorized?
b. How many shares were issued?
c. How many shares are outstanding?
d. What is the balance of the Common Stock account?
e. What is the balance of the Treasury Stock account?
Answer:
a. 4,300,000 shares
This is the maximum issuance allowed by the Corporate Charter so is the authorized share quantity.
b. 2,060,000 shares were issued as per the question
c. Number of shares outstanding = Number of shares issued - Treasury shares
= 2,060,000 - 88,000
= 1,972,000 shares
d. Balance in Common stock account:
= Number of shares issued * par value
= 2,060,000 * 1
= $2,060,000
e. Balance in Treasury:
= 800,000 * 25
= $2,200,000
Gilberto Company currently manufactures 75,000 units per year of one of its crucial parts. Variable costs are $2.45 per unit, fixed costs related to making this part are $85,000 per year, and allocated fixed costs are $72,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.65 per unit guaranteed for a three-year period.
Required:
Calculate the total incremental cost of making 75,000 and buying 75,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier?
Answer:
$2,000
Explanation:
The total incremental cost of making 75,000 and buying 75,000 units.
People who are confident but not
about their own talents are more
impressive than people who don't believe in their own abilities.
A.aggressive
B.arrogant
C.insecure
D.embarrassed
Answer:
C. insecure
when youre insecure you dont feel good about yourself or your abilities
This is weird what is ya favorite anime character
Answer:
naruto
Explanation:
He is my favourite anime character.........
list of purpose & uses of assets
Answer:
Explanation:
Assets may be used to store wealth, create income, and reduce future expenses.
Assets are reported on a company's balance sheet and are bought or created to increase a firm's value or benefit the firm's operations. An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses, or improve sales, regardless of whether it's manufacturing equipment or a patent.
Hope this helped!!
Prepare an income statement for the year ended December 31, through the gross profit for Baxter Company using the following information. Baxter Company sold 8,600 units at $125 per unit. Normal production is 9,000 units. (Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.)
Standard: 5 yards per unit at $6.30 per yard
Standard: 2.25 hours per unit at $15.00
Standard: variable overhead $1.05 per unit
Standard: fixed overhead $211,500 (budgeted and actual amount)
Actual yards used: 43,240 yards at $6.25 per yard
Actual hours worked: 19,100 at $14.90 per hour
Actual total factory overhead: $235,500
Answer:
Baxter Company
Baxter Company
Income Statement
For the year ended December 31
Sales revenue $1,075,000
Cost of goods sold 755,252
Gross profit $319,748
Explanation:
a) Data and Calculations:
Normal production units = 9,000
Units sold at $125 per unit = 8,600
Ending inventory = 400
Sales revenue = $1,075,000 (8,600 * $125)
Standard: 5 yards per unit at $6.30 per yard
Standard: 2.25 hours per unit at $15.00
Standard: variable overhead $1.05 per unit
Standard: fixed overhead $211,500 (budgeted and actual amount)
Cost of production:
Direct materials (43,240 yards at $6.25 per yard) = $270,250
Direct labor (19,100 at $14.90 per hour) = 284,590
Total factory overhead incurred = 235,500
Total cost of production = $790,340
Units produced = 9,000
Cost per unit = $87.82
Cost of goods sold = 8,600 * $87.82 = $755,252
Cost of ending inventory = 400 * $87.82 = $35,128
Exercise 23-10 Keep or replace LO P5Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $35,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $45,000. Variable manufacturing costs are $33,800 per year for this machine. Information on two alternative replacement machines follows. Alternative A Alternative BCost$124,000 $115,000 Variable manufacturing costs per year 22,100 10,700 Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine
Answer:
Xinhong should replace its manufacturing machine
Explanation:
Xinhong Company Alternative A
Increase or decrease in net income
Particulars Amount
Cost to buy new machine -$124,000.00
Cash received to trade in old machine $45,000.00
Reduction in variable manufacturing cost $46,800.00
($33,800 - $22,100)*4
Total change in net income -$32,200.00
Xinhong Company Alternative B
Increase or decrease in net income
Particulars Amount
Cost to buy new machine -$115,000.00
Cash received to trade in old machine $45,000.00
Reduction in variable manufacturing cost $92,400.00
($33,800 - $10,700)*4
Total change in net income $22,400.00
Conclusion: Xinhong should replace the existing machine as incremental net income is high for the alternative.
According to the World Bank, the 31 wealthiest countries in the world tended to have much lower rates of ___________ and much higher rates of ___________ when compared to the 40 poorest countries.
A. Infant mortality; adult literacy
B. Internet users; life expectancy
C. Adult literacy; cell phone subscriptions
D. Access to water; access to sanitation
Answer:
Internet users;life expectancy Access to water; access to sanitationi HOPE IT'S HELPplease mark in brain list
According to the World Bank, the 31 wealthiest countries in the world tended to have much lower rates of . Infant mortality and much higher rates of adult literacy when compared to the 40 poorest countries. Option (a) is correct.
What do you mean by Literacy?The ability to read, write, speak, and listen in a way that enables us to successfully communicate and make sense of the outside world is known as literacy.
According to a National Research Council assessment, the United States' healthcare system is one of the reasons why life expectancy is shorter than in other industrialized countries. Life expectancy declines are most noticeable among US people 50 and older.
Generally speaking, wealthy countries have a longer average life expectancy than poorer countries, which can be justified by higher standards of living, more effective health systems, and greater financial commitment to factors that influence health (e.g. sanitation, housing, education).
Therefore, Option (a) is correct. Infant mortality; adult literacy
Learn more about Literacy, here;
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On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 20 million, $5.00 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $16 on June 13. Prepare a journal entry that summarizes the declaration and distribution of the stock split if it is to be effected in the form of a 100% stock dividend. What is the par per share after the split
Answer:
a. No journal entry is required.
b. Par per share after the split = $2.50
Explanation:
a. Prepare a journal entry that summarizes the declaration and distribution of the stock split if it is to be effected in the form of a 100% stock dividend.
No journal entry is required for this because the total value of the shares has not changed due to 2-for-1 stock split.
This is because the 2-for-1 stock split has only increased the number of shares outstanding by 2, but at the same time reduces the par value of the share by half making the total value of the shares to remain the same.
b. What is the par per share after the split.
As explained in a above, the effect of 2-for-1 stock split is to reduce the par value of the share by half.
Therefore, the par per share after the split can be calculated as follows:
Par per share after the split = Par per share before the split / 2 = $5 / 2 = $2.50
Which of the following is a well written goal for developing a system?
O To institute a more efficient food preparation system
O To hire more housekeepers
To institute a two-week training program for the front desk employees to teach them how to use the new communication system
O To earn at least $5,000 in gift shop revenue more next month
a good written goal for developing a system is B
Paul’s will creates a General Power of Appointment Trust (GPOA) that distributes income to his wife annually for life and gives his wife a general power of appointment over the assets in the trust. Which of the following statements is true regarding a GPOA Trust? A. The GPOA Trust only qualifies for the unlimited marital deduction if the trustee agrees to make distributions of principal to Paul’s trust. B. The unlimited marital deduction cannot be elected over the property transferred to the trust because Paul’s wife cannot appoint assets to herself, her creditors, or to anyone on her behalf. C. The unlimited marital deduction is not available because Paul’s wife does not have the current right to the assets in the trust. D. The GPOA Trust automatically qualifies for the unlimited marital deduction because Paul’s wife has a general power of appointment over the trust’s assets.
Answer: D. The GPOA Trust automatically qualifies for the unlimited marital deduction because Paul's wife has a general power of appointment over the trust's assets.
Explanation:
General Power of Appointment Trust (GPOA) refers to a power of appointment which is a legally binding provision that's contained in a trust such that the beneficiary possess the authority to alter the beneficiaries of the trust.
In this case, Paul's wife possess the power of appointment to anyone on her behalf. Therefore, The GPOA Trust automatically qualifies for the unlimited marital deduction because Paul's wife has a general power of appointment over the trust's assets.
In what way are mutual funds similar to common stocks
A) Investors get to vote a major decision for all really good investment
B) Mutual funds offer your risk-free investment opportunity
C) investing in a mutual fund gives the investor a Proportionate ownership in that fun
Answer:
Option C defines the similarity between the mutual funds and common stocks
Explanation:
Common stocks is just like buying shares of a company and having certain % of share in that fund.
Like wise mutual funds are too equivalent to buying shares or stocks but not individually but with other people having proportionate sharing governed by the amount invested by each individual.
Hence, option C is correct
Answer:
Investing in a mutual fund gives the investor a proportionate ownership in that fund.
Explanation:
I got it right on the test nun to worry about.
Break-even analysis can be used by a firm that produces more than one product, but:
a. the results are estimates, not exact values.
b. the firm must allocate some fixed cost to each of the products.
c. each product has its own break-even point.
d. the break-even point depends upon the proportion of sales generated by each of the products.
e. None of these statements is true.
Answer:
d. the break-even point depends upon the proportion of sales generated by each of the products.
Explanation:
Breakeven analysis is the method used to determine the number of units a firm must sell at a specific price to cover all costs. It is a concept that allow business owners or financial experts to determine and know what they need to sell either on a monthly or annual (yearly) basis, in order to be able to cover the costs of doing the business.
Basically, it helps us to determine the amount of revenue required for the smooth operation of a business, amount of money needed to cover both fixed and variable costs. Using the breakeven analysis, production costs can be categorized as;
1. Variable costs: these are costs that usually change with respect to changes in the level of production or output. Examples are direct labor, maintenance of equipment or machines, raw materials costs etc.
2. Fixed costs: these are the costs which are not directly related to the level of production or not affected by the quantity of output in an organization. Examples are rent, depreciation, administrative cost, research and development costs, marketing costs etc.
Break-even analysis can be used by a firm that produces more than one product, but the break-even point depends upon the proportion of sales generated by each of the products.
Also, although budgetary deficits are designed to shift the aggregate demand curve to the right, it also A) the demand for loanable funds in the financial sector of the economy. This could cause real B) rates to C) . The effect would be that D) spending by firms would fall, thereby offsetting (to a degree) the intended effect of policy. This phenomenon is known as the E) effect.
On November 15, 2018, X Corp., an accrual basis taxpayer, enters into a contract which will provide the corporation with the use of manufacturing equipment for the 5 year period beginning on December 1, 2018. X Corp. paid $100,000 for the 5-year period on December 1, 2018. How much, if any of the payment can X Corp. deduct in 2018
Answer: $20000
Explanation:
Since $100,000 is paid for the contract which will provide the use of manufacturing equipment for 5 years, the payment that can be deducted for each of the 5 years will be an equal payment.
Therefore, the payment that X Corp. can deduct in 2018 will be:
= $100,000 / 5
= $20000
what does CPI stand for and what is it used to measure?
Answer:
please give me brainlist and follow
Explanation:
Consumer Price Index
The Consumer Price Index (CPI) is a measure of the average change overtime in the prices paid by urban consumers for a market basket of consumer goods and services.
Laura is an investor and a limited partner in a limited partnership. Two years after she becomes a limited partner, Laura thinks that the general partners are not doing a very good job managing the affairs of the limited partnership and participates in the management of the limited partnership. While she is participating in management, a bank loans $1 million to the limited partnership, believing that Laura is a general partner. If the limited partnership defaults on the $1 million loan, which of the following holds well?
A. Laura has unlimited personal liability as a limited partner.
B. Laura is personally liable as the bank, in good faith, thought she is a general partner.
C. Laura's liability is restricted to the value of her capital investment in the partnership.
D. Laura is not personally liable as she is a limited partner on paper.
Answer
Option B. Laura is personally liable as the bank, in good faith, thought she is a general partner
Explanation:
Limited Partnership (LP)
This is Business entity that exists in line with state statutes that gives limited liability to some of its members who called limited partners.
RULPA
This is simply called Revised Uniform Limited Partnership Act. It is the model for Limited Partnership legislation in most states.
Limited Partner
This is a part or member of a limited partnership.it is that individual who is not involved in controlling the business and whose liability is limited to amount invested in the business.
General Partner
It is simply a member in a limited (or general) partnership who controls the business and has unlimited personal liability.
In the above scenario, Laura will be taken as a general partner and will be held personally accountable or liable for the loan, and also along with the general partners of the limited partnership.The rule of RULPA gives the right for a limited partner to be involved in the management of the partnership’s affairs and not losing the limited liability if the limited partner has been formally employed by the partnership to be an executive of the partnership.
Need help ASAP Need help ASAP
Need help ASAP Need help ASAP
Need help ASAP Need help ASAP
Need help ASAP Need help ASAP
Answer:
number 3 lang ung X 1 2 4 5 heart na
[tex]\huge{\mathbb{\tt { ANSWER↓}}}[/tex]
[tex]\color{red}{\tt { HEART} \: \: }\color{black}{\tt{Lumahok \: sa \: panuntunan \: sa \: kalinisan.}}[/tex]
[tex]\color{red}{\tt { HEART} \: \: }\color{black}{\tt{Gumawa \: ng \: poster \: tungkol \: sa \: mabuting \: epekto \: ng \: kalikasan.}}[/tex]
[tex]\color{green}{\tt { WRONG} \: \: }\color{black}{\tt{Huwag \: Pansinin \: ang \: ordinansa \: o \: batas \: tungkol \: sa \: kalinisan.}}[/tex]
[tex]\color{red}{\tt { HEART} \: \: }\color{black}{\tt{Sundin \: ang \: batas \: sa \: pag-iwas \: o \: pagpigil \: sa \: polusyon.}}[/tex]
[tex]\color{red}{\tt { HEART} \: \: }\color{black}{\tt{Panatilihin \: ang \: kalinisan \: sa \: kapaligiran.}} \: [/tex]
#CarryOnLearning
#LetsEnjoyTheSummer
→XxKim02xXa decrease in supply is illustrated by the supply curve shifting to the
left or right
Answer:
Left******************
Which business type pays double tax to the government
Answer:
C corporation income
Explanation:
What are various options to regulate monopolies in the United States?
I’ll give brainliest
Answer:
ok I'll give you what I know monopolies are one business operating so try and use that
[tex]\color{green}{\tt {Regulation \: of \: monopoly}}[/tex]
The government may wish to regulate monopolies to protect the interests of consumers. For example, monopolies have the market power to set prices higher than in competitive markets. The government can regulate monopolies through:Price capping – limiting price increasesRegulation of mergersBreaking into cartels and unfair practisesNationalisation – government ownership.[tex]\color{red}{\tt {Why \: the \: Government \: regulates \: monopolies}}[/tex]
Prevent excess prices. Without government regulation, monopolies could put prices above the competitive equilibrium. This would lead to allocative inefficiency and a decline in consumer welfare.Quality of service. If a firm has a monopoly over the provision of a particular service, it may have little incentive to offer a good quality service. Government regulation can ensure the firm meets minimum standards of service.Monopsony power. A firm with monopoly selling power may also be in a position to exploit monopsony buying power. For example, supermarkets may use their dominant market position to squeeze profit margins of farmers.Promote competition. In some industries, it is possible to encourage competition, and therefore there will be less need for government regulation.Natural Monopolies. Some industries are natural monopolies – due to high economies of scale, the most efficient number of firms is one. Therefore, we cannot encourage competition, and it is essential to regulate the firm to prevent the abuse of monopoly power.#CarryOnLearning
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