Suppose a nonlinear price discriminating monopolist faces an inverse demand curve:
P = 175 - Q
and can set three prices depending on the quantity a consumer purchases. The firm's profit is:
pi = P1 Q1 + P2 (Q2 - Q1) + P3 (Q3 - Q2) - mQ3
where p1 is the high price charged on the first units Q1 (first block) and p2 is a lower price charged on the next (Q1 - Q2) units and is the lowest price charged on the remaining (Q3 - Q2) units. Q3 is the total number of units actually purchased, and m = $50 is the firm's constant marginal and average cost. Using calculus, determine the profit-maximizing values for p1, p2, and p3, and the firm's profits.
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Ответ:
A. No Entry
No Entry
B. Dr Retained Earnings $105,000,000
Cr Common Stock Dividend Distributable $105,000,000
Dr Common Stock $105,000,000
Cr Common Stock $105,000,000
Explanation:
A. Preparation of the necessary journal entries assuming the The board declares and issues a 2-for-1 stock split.
No Entry
No Entry
B. Preparation of the necessary journal entries assuming theThe board declares and issues a 100% stock dividend.
Dr Retained Earnings $105,000,000
Cr Common Stock Dividend Distributable $105,000,000
($10 x 10.50 million)
(To record the declaration)
Dr Common Stock $105,000,000
Cr Common Stock $105,000,000
(To record the distribution)