Define production limits used in practice to raise prices, Financial Management

Assignment Help:

How are production limits used in practice to raise the prices of the following goods or services:

(a) taxi rides,

(b) drinks in a restaurant or bar,

(c) wheat or corn?

Municipal authorities generally regulate the number of taxis by the issuance of licenses. While the number of taxis is less as compared to it would be without regulation, those taxis in the market may charge a higher-as compared to the competitive price.

State authorities generally regulate the number of liquor licenses.  Through requiring that any bar or restaurant which serves alcohol have a liquor license and then limiting the number of licenses available, the State limits entry through new bars and restaurants.This limitation permits those establishments which have a license to charge a higher price for alcoholic beverages.

Federal authorities generally regulate the number of acres of wheat or corn in production by making acreage limitation programs which provide farmers financial incentives to leave some of their acreage idle. This decreases supply, driving up the price of wheat or corn.


Related Discussions:- Define production limits used in practice to raise prices

Explain about centralised treasury function, Q. Explain about Centralised t...

Q. Explain about Centralised treasury function? Treasury departments are usually a feature of larger companies than Frantic although it is perhaps beneficial to consider the be

Explain the npv criterion, Consider that you are deciding whether to undert...

Consider that you are deciding whether to undertake one of two projects. Project A involves buying expensive machinery which will produce a better product at a lower cost. The mach

Valuation an option-free bond with the tree, Let us construct a binom...

Let us construct a binomial interest rate tree for a 5.5% option free bond taking Table 3 as the binomial interest rate tree. Table 1 shows the various values in

Expects the per capita expenditure, Expects the per capita expenditure: ...

Expects the per capita expenditure: A township expects its population of 5,000 to grow annually at the rate of 5%. The township currently spends $300 per inhabitant, but, as t

Advanced financial management, QUESTION 1 [25 marks] Xelo Ltd, whose curren...

QUESTION 1 [25 marks] Xelo Ltd, whose current sales consist of fixed operating costs of R140 000 and variable operating costs equal to 22% of sales, has made the following two sale

Dividend policy, #questThe managing directors of three profitable listed co...

#questThe managing directors of three profitable listed companies discussed their companies'' dividend policies at a business lunch. Company A; has deliberately paid no dividends

Explain do mergers result in layoffs, Do mergers result in layoffs? Whole...

Do mergers result in layoffs? Whole employment in the banking industry in fact has increased slightly over the last ten years. A few mergers do result in layoffs. Though, many ba

List the main features of ordinary shares, Question 1 Describe the types o...

Question 1 Describe the types of investment decisions Question 2 List the main features of ordinary shares Question 3 List the assumptions of Walter's dividend model. Ex

Types of rating - individual/borrower rating, Individual/Borrower Rating ...

Individual/Borrower Rating This includes rating a borrower to whom a loan/credit facility may be sanctioned.

Healthcare finance, You are considering starting a walk-in-clinic. Your fin...

You are considering starting a walk-in-clinic. Your financial projections for the first year of operation are as follows: Revenues (10,000 visits) $400,000 Wages and benefits $220,

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd