Price of steel jumped, Macroeconomics

Assignment Help:

Your firm usually uses about 200-300 tons of steel per year. Last year, you purchased 100 tons of steel than needed (at a price of $200 per ton) In the meantime, the price of steel jumped to $250 per ton delivered (which means that any firm selling the steel must pay any shipping costs), and the price has since stabilized at that price. The cost of shipping steel to the nearest buyer would be $20 per ton. In the meantime, a business next door just went bankrupt, and the bank is offering a special deal where you can buy another 100 tons of steel for $180 per ton. Assume that the interest rate is 0%. Which of the following are correct. a. Sell your 100 tons at the going market price $250, and make a profit of $30 per ton ($50 less $20 cost of shipping b. Buy the 100 tons next door at $180, and resell at a price of $250 less $20 shipping, for a net profit of $50 a ton. c. Hold onto your 100 tons, and wait until it is needed for production d. Buy the 100 tons next door at $180, and hold onto it until it is needed in production


Related Discussions:- Price of steel jumped

Price-elasticity of demand coefficient of a firm''s product, a) Use the arc...

a) Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity, price) points of (100, $20) and (300,

The income tax rate is reduced, If income falls below its potential and the...

If income falls below its potential and the income tax rate is reduced, this will: A. raise the passive deficit but reduce the structural deficit. B. raise both the passive and str

Balance of payment, with the help of a graph, explain factors that may caus...

with the help of a graph, explain factors that may cause a shift in the balance of payments

Duesenberry relative income theory of consumption, how does deusenberry rel...

how does deusenberry relative income theory influences inflation

How price level rises differ from price rises, How price level rises differ...

How price level rises differ from price rises In macroeconomics, it's common to use term "prices" or "price" as short for price level. Expression "prices rise" must be interpre

Accounting system-example i, ACCOUNTING SYSTEM-EXAMPLE I  Consider a ve...

ACCOUNTING SYSTEM-EXAMPLE I  Consider a very simple economy. It consists of a. A number of households. b. A single productive organization, a 'firm' - say the Jam Corpora

Population growth is greater than the growth of real output, If population ...

If population growth is greater than the growth of real output, A. real per capita Gross Domestic Product (GDP) growth will be less than the growth of real Gross Domestic Product

Inflation unemployment trade off under adaptive expectations, Explain how i...

Explain how inflation unemployment trade off is not feasible under adaptive expectations?

Market structures, illustrate and discuss the implications of variou market...

illustrate and discuss the implications of variou market structures (competitive and noncompetitive) for price determination

Goods market and factors market, Goods Market and Factors Market: Good...

Goods Market and Factors Market: Goods  market  is  the  market  where  goods  are  bought  and  sold  for  the  purpose  of consumption Factors markets are the markets

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