A price variance is the difference between actual materials used in the product's standard cost for manufacturing overhead is computed same way as standard cost for direct labor.
What is price variance?In cost accounting, the word "price variance" (Vmp) refers to the discrepancy between the projected cost of an item (standard cost) and the actual cost at the moment of purchase. The quantity of things ordered frequently has an impact on the price of an item, and this is taken into account. A price variation indicates the possibility of actual expenditures going over the allocated amount, which is typically undesirable. When businesses choose how much of a particular item to buy, this is significant. When the Standard Materials Price is greater than the Actual Materials Price and less money was spent on the materials than the permitted standard, the variance is said to be positive.
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Rhiannon is an inside sales representative at a natural cosmetics company. She recently sold a new primer the company released to many clients. However, the pump on the primer bottle does not work properly. Investigation shows the error stems from the manufacturer of the pump. Rhiannon’s sales manager had pressured rhiannon to sell this new product, and now rhiannon is worried that this is not an isolated incident. In this case, there could be a major recall, and the firm’s ceo would have to get involved. If a client is highly dissatisfied and wants to express discontent, who are they most likely to contact first?.
If a client is highly dissatisfied and wants to express discontent, Rhiannon's sales manager is the most likely to contact first.
Control consists of the sports of placing the approach of an organization and coordinating the efforts of its personnel (or of volunteers) to perform its goals through the software of to-be-had sources, along with financial, herbal, technological, and human assets. "Run the business"[1] and "trade the business" are concepts that are utilized in control to differentiate among the continuing transport of goods or services and adapting of products or services to fulfill the changing desires of clients - see trend. The term "management" can also consult with the ones people who manipulate an enterprise—managers.
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a property could be sold today for $2 million. it has a loan balance of $1 million and, if sold, the investor would incur a capital gains tax of $250,000. the investor has determined that if it were sold today, she would earn an irr of 15 percent on equity for the past five years. if not sold, the property is expected to produce after-tax cash flow of $50,000 over the next year. at the end of the year, the property value is expected to increase to $2.1 million, the loan balance will decrease to $900,000, and the amount of capital gains tax due is expected to increase to $255,000. the owner determines that if the property were renovated instead of sold, after-tax cash flow over the next year would increase to $60,000 and the property could be sold after one year for $2.4 million. renovation would cost $250,000. the investor would not borrow any additional funds to renovate the property. a. What is the marginal rate of return for keeping the property one additional year? b. What advice would you give the investor?
The marginal rate of return (MRR) will be 32.6% & Since MRR is higher than IRR, investors should keep properties in industrial areas. This means that at MRF's highest rate, at IRR he would have more than $750,000 in cash flow if the property were held and invested the following year.
What is the internal rate of return?Internal rate of return (IRR) is a metric used in financial analysis to estimate the potential profitability of an investment. IRR is the discount rate that drives the net present value (NPV) of all cash flows to zero in a discounted cash flow analysis.The higher the internal rate of return, the better the investment. Because IRR is consistent across different types of investments, it can be used to rank multiple potential investments or projects relatively evenly. In general, when comparing investment options with other similar characteristics, the investment with the highest IRR may be considered the best. The ultimate goal of IRR is to find a discount rate such that the total present value of annual nominal cash inflows equals the investment's initial net cash outflows.The IRR is ideal for analyzing capital budgeting projects to understand and compare potential future annual returns.IRR is not only used by companies to determine which capital projects to use, but it also helps investors determine the return on investment of various assets.to know more about IRR refer to
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In the united states for the year 2020, the federal government had a ________ so the national debt was ________.
In the united states for the year 2020, the federal government had a budget deficit therefore national debt was increasing.
The federal government borrowed money to cover budget deficits for a long period of time, which led to the national debt. Since the start of 2020, total debt has increased by almost $8 trillion. In only eight months, it has increased by $1 trillion. During a period when interest rates were low, money was borrowed during the Trump administration as well as in the early days of the Biden administration.
Japan has the highest relative debt of any developed economy when compared to its GDP, even though the United States has the largest national debt in terms of finances. Sharp increases in the national debt are typically explained by tax cuts, stimulus initiatives, higher government spending, and a decline in tax revenue due to high unemployment.
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Assume that a firm distributes all of its carnings as dividends. Which of the following is indicated by a price-carnings (P/E) ratio of 10? a. It would take 10 years for an investor to recover his or her initial investment. b. The firm will pay a dividend of $10 per share. c. The value of the stock will be 10 times the initial investment at the time of maturity d. The stock's value will increase by 10 percent every year. e. An investor would receive 10 percent of the total earnings of the firm at the time of liquidation
A. P/E ratio indicates that an investor would need to wait 10 years to recoup their initial investment.
The P/E ratio reveals the payback period for a stock. If a company's P/E ratio is 10, it would take an investor 10 years to recoup their initial investment if the company pays out all of its earnings as dividends.
The ratio for valuing a company that compares its current share price to its earnings per share is called the price-to-earnings ratio. The price multiple or earnings multiple are other names for the price-to-earnings ratio.
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true or false? a hospital offers a coupon in the newspaper for a free heart-healthy assessment for individuals over age 60 for 2 weeks after opening the new heart center. this is an example of a sales promotion strategy.
This is true that a hospital offers a coupon in the newspaper for a free heart-healthy assessment for individuals over age 60 for 2 weeks after opening the new heart center. this is an example of a sales promotion strategy.
A heart health assessment is simple and easy. It will include a review of your kin record of what happened, weight, ancestry pressure, an ECG, and a few natural ancestry tests. The results of this appraisal are inspected by your GP to signify your risk of heart failure.
A promotion strategy is a litigable plan to influence the population about your trade, generate more leads, and boost client dates. It visualizes how to act your marketing design and ideas, the one to aim as your hearing, and where and when to kill the publicity plan. The most main purpose that a promotion serves is that it sets a business other from allure opponents.
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gulf shores inn is comparing two separate capital structures. the first structure consists of 280,000 shares of stock and no debt. the second structure consists of 228,000 shares of stock and $1.62 million of debt. what is the price per share of equity?
The price per share of the equity of golf shores is equal to $31.15.
A mixed or leveraged structure, which includes both stock and loan components, is the second type of structure. The amount of capital that must be raised does not change.
Gulf will forfeit 280,000 - 228000 = 52,000 shares and must raise $1.62 million in debt. We expected that Gulf would raise the same amount from both constructions. Consequently, 52,000 shares at price x equal to $1.62 million in debt.
$1,620,000=52,000x
x=$1,620,000/52,000
x=$31.15
x or price per share is equal to $31.15
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What is the relationship between the data life cycle and the data analysis process.
Data transformation and verification are topics covered by the data life cycle; data analysis uses the knowledge discovered by the data.
The comparisons between the data life cycle and data analysis are shown in the list below: They both have a passion for data analysis. Both approaches are employed in data science. Both seek to draw inferences from the available facts. The stages that data goes through during its useful life are covered by the data life cycle; data analysis is the process of evaluating data.
The data life cycle is the process by which a particular piece of data travels from being created or recorded to being archived and/or removed at the end of its useful life. Data management experts often regard six or more stages as being a component of the data life cycle, however, specifics can vary.
Data analysis is the act of analyzing, filtering, modifying, and modeling data in order to identify pertinent information, come to conclusions, and support decision-making.
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Given the following data: r = $1.00/ f = $1.00/ i u.s. = %
If the interest parity condition is expected to hold, interest rates in Japan (Japan) should equal _______
If the interest parity condition is expected to hold, interest rates in Japan (Japan) should equal 16%.
0.14 = interest of f +(100-102)/102 = 16%
In finance and economics, interest is the price from a borrower or deposit-taking economic institution to a lender or depositor of an amount above compensation of the major sum (that is, the amount borrowed), at a specific charge. it's miles distinct from a rate that the borrower may pay the lender or a few 0.33 celebrations. it is also awesome from a dividend that's paid via an agency to its shareholders (owners) from its profit or reserve, but not at a specific rate determined ahead, alternatively on a pro-rata basis as a percentage within the praise received by means of hazard-taking marketers whilst the revenue earned exceeds the full charges.
For instance, a patron could normally pay hobby to borrow from a bank, in order that they pay the financial institution a quantity this is extra than the quantity they borrowed, or a purchaser might also earn hobby on their savings, and so they will withdraw extra than they in the beginning deposited. in the case of financial savings, the purchaser is the lender, and the financial institution plays the function of the borrower.
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rue or false: businesspeople may behave unethically simply because they forget to ask themselves whether the decision or action they are making is ethical.
True, Simply by failing to consider whether the choice or action they are taking is moral, business people may act unethically.
What is business?
Making a living or earning money through the production, acquisition, and sale of items is referred to as doing business (such as goods and services). Additionally, it includes "any activity or enterprise undertaken for profit." Since the business entity isn't really legally distinguishable from the owner by a business name, the owner of the business is accountable and liable for any commitments made by the business. If a business accumulates debt, creditors may seize a owner's personal belongings. Business structures are not allowed to use corporate tax rates. The proprietor is required to pay personal taxes on all business income.
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Candidates for the management development program at genco enterprises must first complete a personality assessment to determine the distinctive characteristics that account for the effectiveness of leadership role. Based on this, it would appear that genco believes in the ___ approach to leadership.
Based on this, it would appear that genco believes in the trait approach to leadership.
The required details about trait is mentiponed in below paragraph.
According to trait management theory, powerful leaders have in not unusualplace a sample of private traits that assist their capacity to mobilize others closer to a shared vision. These developments include dimensions of character and motives, units of talents and capabilities, and conduct in social relationships.Using developments to give an explanation for powerful management considers each traits which are inherited and attributes which are learned. This method has been used to distinguish leaders from non-leaders. Understanding the significance of those developments can assist groups select, train, and expand leaders.Allport grouped those developments into 3 special categories: cardinal developments, relevant developments, and secondary developments.
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total revenue is question 4 options: a) the price of a good divided by the amount of the good sold. b) the price of a good times the quantity of the good that is sold. c) the price effect times the quantity effect. d) total sales less total cost.
c) the price effect times the quantity effect is total revenue.
What happens when prices go up to the total revenue?As a result, raising prices will result in higher overall revenue while lowering prices will result in lower overall income. Demand is said to be unit elastic when the percentage change in quantity sought is equal to the percentage change in price.
When prices go up and demand is elastic, what happens to overall revenue?If demand is elastic, a price rise will result in a decrease in overall revenue. Demand decreases significantly as a result of price rises. The overall revenue then begins to fluctuate in opposite directions. As a result, when the price of any commodity increases, total income decreases.
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shares of stock are multiple choice legal promises to repay a debt. none of the other answers are correct. claims to partial ownership of a firm. regular payments made to owners of a firm. legal promises to make regular payments to the stockholder.
Shares of stock are claims to partial ownership of a firm.
What do you mean by shares?The smallest unit of stock in a firm is called a share. Therefore, the appropriate word to employ when allocating stock and referring to certain attributes is shares. In a technical sense, shares correspond to stock units. The terms "common" and "preferred" describe several classes of a company's shares. On the other hand, a share alludes to a certain company's stock certificate. You become a shareholder if you possess shares of a specific corporation. The capital of a firm is split up into tiny, equal units of a finite number. Shares are the name given to each unit. A share, to put it simply, is a portion of ownership in a business or a financial asset. Shareholders are investors who possess stock in a corporation.
Hence, Shares of stock are claims to partial ownership of a firm.
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the inventory system emplouying accounting records that continuously disclose the amont of inventory is called
The inventory system employing accounting records that continuously disclose the amount of inventory would termed as Perpetual inventory.
With computerized point-of-sale systems, perpetual inventory is a method of accounting that continuously records inventory changes in real-time, doing away with the need for physical inventory checks. In the accounting records, a perpetual inventory system continuously monitors the inventory. Instead of conducting a physical inventory, a perpetual inventory system uses software to continuously estimate your inventory based on your electronic records.
The baseline for this system is a physical count, and it is updated as a result of incoming purchases and outgoing shipments. Perpetual inventory systems, also known as continuous inventory systems, are inventory management techniques where information on inventory quantity and availability is updated continuously and in real-time as a part of business operations.
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people often use the rational decision making model when:
People often use the rational decision-making model when:employed where relatively complex decisions must be made.
A decision-making model describes the approach a team will use to make decisions. The maximum important element in successful choice-making is that every team member is clear about how a specific choice will be made.
It allows to make sure that the right selection-making fashion is used for every situation, which can cause better effects. regardless of what kind of corporation you are, or what type of trouble you are going through, there is a selection making model that assist you to find the first-rate solution.
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on september 1, 2024, daylight donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on march 1, 2025. daylight donuts accrued interest for the note on december 31, 2024. which of the following would be recorded on the payment of the note plus accrued interest at maturity on march 1, 2025? (do not round your intermediate calculations.)
At the note's maturity on March 1, 2025, $3000 plus accrued interest would be recorded.
What do you meant by interest?The fee you pay to take funds or the fee you charge to lend money is called interest. Most common way to represent interest is as an annual percentage of the loan amount. The cost of borrowing on the loan is known as this percent.
What is the simple interest of meaning?Simple interest is calculated based on a lender's principal or the initial deposit into a savings account. Simple interest doesn't accumulate, therefore a creditor will only charge interest on the principal sum, and a borrower will never be required to pay further interest on the interest that has already accrued.
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accounting information gained wide popularity due to: group of answer choices the increase in popularity of investing none of these answers the development of joint sock companies the rise in government control over business
Accounting information gained wide popularity due to the increase in popularity of investing
What is investment?Making an investment entails using money now in the hopes that it will appreciate later.An investment is putting capital to use, such as time, money, effort, etc., with the hope of receiving a larger return than what was initially invested.Any method or tool used to produce future income is referred to as an investment, including bonds, equities, real estate, and alternative investments.Investments typically don't guarantee an increase in value; you can finish up with less money than you started with.Diversifying investments can lower risk, but doing so may also lower income potential.The purpose of investing is to provide income and build wealth over time. Any method for producing potential future revenue might be referred to as an investment. Buying bonds, equities, or real estate property are a few examples of this. A property that can be utilised to create things can also be bought and regarded as an investment.To learn more about investment, refer to
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The american public grew increasingly aware of the political influence of corporations as?.
Political cartoonists' depictions of the issue raised the American public's awareness of corporations political influence.
An organization that is authorized by the state to act as a single entity and is recognized as such in law for specific purposes is known as a corporation. This organization is typically a company or group of people. Early corporations had charters that set them up. In most jurisdictions today, new corporations can be formed through registration. The limited personal liability, simple ownership transfers, business continuity, improved access to capital, and (depending on the corporation structure) sporadic tax benefits are just a few benefits of becoming a corporation. Like all commercial entities, the corporation's main goal is to make money. Corporations contribute to the advancement of society at large by generating profits for their shareholders. A corporation's actual owners are its shareholders, and its board of directors is in charge of overall management.
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18. a valid contract is an agreement that meets the required elements for legal recognition (offer, acceptance, consideration, capacity, and legality). group of answer choices true false
The statement " a valid contract is an agreement that meets the required elements for legal recognition (offer, acceptance, consideration, capacity, and legality)" is true.
What is a contract?Contracts are typically in writing and are signed by all parties involved. Contracts typically outline the terms of an agreement, including what each party will do, what they will not do, and any consequences for breaching the contract. Contracts are often used in business agreements, such as leases, employment agreements, and sales contracts. They can also be used in personal agreements.
A valid contract must contain all the vital elements of a contract and for a contract to be valid, it must contain certain elements. Such elements include legality, capacity, consideration, acceptance, and offer. Only when all these elements are fulfilled, a contract can be deemed to be valid.
It can be concluded that the statement " a valid contract is an agreement that meets the required elements for legal recognition (offer, acceptance, consideration, capacity, and legality)" is true.
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As described in the ten axioms for success, what approach should be used to addresses a common source of project failure described as scope creep or drift caused by deviations from the project plan?.
The reason this approach should be used is that it will help to ensure that the project stays on track and does not deviate from its original objectives.
How to Address Scope Creep or Drift Caused by Deviations from the Project PlanThe approach that should be used to address a common source of project failure described as scope creep or drift caused by deviations from the project plan is to establish clear project objectives and milestones, and to track progress against these objectives and milestones. By tracking progress against clear objectives and milestones, it will be easier to identify when scope creep or drift is occurring so that corrective action can be taken.
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a hospital orders latex gloves in lots of 150 boxes. inventory is depleted at a constant rate and orders are placed so that the new gloves arrive when the inventory of gloves reaches zero boxes. what is average inventory level over time? a. 200 b. 150 c. 100 d. 175 e. 125 f. 75 g. 250
f. 75 is average inventory level over time.
what is average inventory level over time?Calculating average inventory involves averaging inventory items over two or more accounting periods. Add the inventory counts at the end of each month, then divide the total by the number of months to determine the average inventory throughout a year.
Given that 150 boxes were ordered, the amount of stock on hand was 0.
Below is the formula for Average Inventory Level:
Average inventory level is equal to (number of orders plus inventory on hand) / 2.
Inventory level on average = 150 + 0 / 2.
Inventory level on average = 150 / 2
75 is the average inventory level.
Consequently, 75 is the average inventory level across time.
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people who pursue careers in management can expect their jobs to include the planning, controlling, leading, and organizing of organizational resources. by definition, the types of resources managers manage include resources.
People who pursue careers in management can expect their jobs to include the planning, controlling, leading, and organizing of organizational resources. by definition, the types of resources managers manage include resources human, physical, information, and financial.
Useful resource refers to all of the materials available in our surroundings which can be technologically reachable, economically viable and culturally sustainable and help us to meet our want and desires.
Assets are whatever that has utility and provides price for your life. Air, water, food, vegetation, animals, minerals, metals, and the entirety else that exists in nature and has application to mankind is a 'aid'.
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when the demand for a country's currency falls, the currency will . a.) have inflationary results at home b.) be more valuable to foreigners c.) appreciate d.) depreciate
The currency will Depreciate, when the demand for a country's currency falls.
When the value of a country's currency falls, it depreciates, which means that one unit of that currency may buy fewer units of another currency. A country's currency depreciation lowers the cost of its export goods for foreigners while increasing the cost of foreign imports for domestic residents.
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akito has not yet paid the rent on his office for the month. how would this debt be labeled on a balance sheet?
Akito hasn't paid his office rent for a month. This debt will be labeled on the balance sheet as Rent Income.
Revenue is the result of the sale of goods or services in a company within a certain period. Actually, not only from sales, a company's income can also come from interest from company assets used by other parties, dividends, and royalties. Everything is summed and recorded in the company's books.
In addition, revenue can also be defined as the costs charged to customers or consumers for the price of goods or services. Revenue is an important factor in a company because it is a measure of the progress or decline of a company. The greater the income, the company is considered more advanced, and vice versa.
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gsp manufacturing uses machine hours to allocate overhead costs to products. budgeted information for the current year follows: budgeted overhead cost $ 217,600 budgeted machine hours 2,560 machine hours budgeted direct labor hours 13,600 direct labor hours the plantwide overhead rate based on machine hours is:
If gsp manufacturing uses machine hours to allocate overhead costs to products. the plantwide overhead rate based on machine hours is:$85 per machine hour.
How to find the plantwide overhead rate ?Using this formula to determine the plantwide overhead rate
Plantwide overhead rate based on machine hours = Budgeted factory overhead costs / Budgeted machine hours
Let plug in the formula
Plantwide overhead rate based on machine hour=217,600 / 2,560 machine hours
Plantwide overhead rate based on machine hours= $85 per machine hour
Therefore plantwide overhead rate is $85 per machine hour
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question content areathe cost of direct materials is assigned to a job by the use of a source document known as a: a.time ticket. b.sales receipt. c.schedule of cost of goods manufactured. d.materials requisition form.
Cost of direct materials is assigned to a job by the use of a source document known as a materials requisition form.
Initiated by a requisition, a specific action is requested and also documented for future reporting requirements. A purchase requisition, for instance, would be used by employees of a company if they required more supplies.
The Requisition (REQS) form is used to record a request to buy products or services from an outside vendor.
A material is something that is used to make another thing. Cloth and things made of matter that exist in the physical world are both considered to be materials. As an adjective and noun, the material can be used in a wide variety of contexts.
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during the current year, stern company had pretax accounting income of $39 million. stern's only temporary difference for the year was rent received for the following year in the amount of $28 million. stern's taxable income for the year would be:
For the entire year, Stern would have $67 million in taxable income.
Pretax accounting income=39 million
temporary difference for the year=28 million
Taxable income = Pretax accounting income+Temporary difference for the year
Taxable income=$39 million+$28 million
Taxable income=$67 million
In general, income is expressed in monetary terms and refers to an entity's ability to save and consume within a given time frame. Conceptually, it is challenging to define income, and different fields may have distinct definitions. One's income may differ from their income as defined by legislation, for instance, depending on how one defines it economically. commonly applied in economics
Haig-Simons income, which defines income as Consumption + Change in Net Worth and is commonly applied in economics, provides an incredibly significant definition of income.
Income is defined by tax law as a figure that includes all wages, salaries, profits, interest payments, rent, and other forms of earnings received throughout a calendar year for families and individuals in the United States.
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company abc is developing a marketing strategy for a new cell phone product and just discovered that abc's biggest competitor is launching a very similar product at almost exactly the same time. in a swot analysis, the competitor's product would be a(n) . strength weakness opportunity threat
In a swot analysis, the competitor's product would be a(n) .threat.
The required details about threat is mentioned in below paragraph.
A Threat is a communication of cause to inflict harm or loss on a few different person. Intimidation is extensively decided in animal behavior (particularly in a ritualized form) particularly as a way to avoid the unnecessary physical violence that could motive physical damage or the loss of life of every conflicting parties. A Threat is considered an act of coercion. Some of the greater now no longer unusualplace patterns of threats forbidden with the useful resource of the use of law are those made with an cause to obtain a financial benefit or to compel a person to act in competition to their will. In maximum US states, it's miles an offense to violence to use a deadly weapon on a few different person; injure a few different's person or property; or injure a few different's reputation.
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select all that apply on march 1, scents, inc. lent $1,000 to an employee at a rate of 6% for 3 months. scents' entry to record the loan of $1,000 to its employee includes a . (check all that apply.)
lent $1,000 to an employee at a rate of 6% for 3 months. scents' entry to record the loan of $1,000 to its employee includes a
credit to Cash of $1,000
debit to Notes Receivable of $1,000
A note receivable is an asset account tied to an underlying promissory note, which details in writing the fee phrases for a purchase between a “payee” (commonly an agency, and occasionally known as a creditor) and the “maker” of the notice (usually a consumer or employee, and every now and then referred to as a debtor).
Notes receivable are a balance sheet item that statistics the price of promissory notes that an enterprise is owed and have to get hold of fee for. A written promissory notice offers the holder or bearer, the proper to get hold of the amount mentioned within the felony agreement.
An observed receivable is likewise called a promissory notice. while the note is due within less than 12 months, it's far considered a modern-day asset on the balance sheet of the organization the note is owed to. If its due date is more than a yr. inside the future, it's far taken into consideration as a non-current asset.
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Complete Question:
On March 1, Cents, Inc. lent $1,000 to an employee at a rate of 6% for 3 months. The entry to record the loan of $1,000 to its employee includes a:
debit to Cash of $1,000.credit to Notes Receivable of $1,000.debit to Interest Revenue of $15.credit to Interest Revenue of $15.credit to Cash of $1,000.the director is responsible for shaping the structure of the production through movement, pace, and rhythm. with this in mind, the faults most often associated with poor direction are blank . multiple select question. if the auteur director's concept of the production is flawed failure to establish a clear rhythm that holds or maintains interest when the audience fails to understand what is going on when the audience repeatedly misses the words being spoken
Based on the situation of the question and the available options, the faults most often associated with poor direction include "When the audience fails to understand what is going on."
What Is the Structure of the ProductionThe structure of production is a term that is used to describe various factors of production and the process involves in the production cycle.
The structure of the production is controlled by humans which is often the directors. These directors are accountable for molding the structure of the production through movement, pace, and rhythm.
Therefore when there is poor direction, it often comes from the following reasons:
When the audience repeatedly misses the words being spokenFailure to establish a clear rhythm that holds or maintains interestHence, in this case, it is concluded that the correct answer is options B, C, and D.
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The pure monopoly extracts all surplus from consumers, yielding higher profits than any other pricing method when it employs which of the following?
A. Perfect price discrimination
B. Perfectly competitive pricing
C. Personal pricing
D. Open Tier Price discrimination
E.First degree Price discrimination
The pure monopoly extracts all surplus from consumers, yielding higher profits than any other pricing method when it employs E) First degree Price discrimination.
Explanation: First Degree Price Discrimination means in a monopoly, the monopolist charges different prices according to the different willingness of the consumers. Suppose, a person has the willingness of Rs. 10, the monopolist is going to charge him with entire Rs. 10 which is his highest willingness to pay for the good and the entire consumer surplus is going to be with him and there will be consumer surplus that will be equal to zero. Also, in this case, total surplus will be producer's surplus. Similarly, if another person has the willingness to pay Rs. 9, the monopolist is going to charge him the entire Rs. 9 and his willingness to pay is exhausted.
Again producer's surplus is going to be Rs. 9 and consumer's surplus will be zero. So eventually, when he reaches the marginal customer, his willingness will also reduce to marginal willingness to pay. So in this way, the monopolist extracts entire consumer surplus and will get great amount of producer's surplus, which will yield him higher profits than any other method.
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