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

Fall in prices and increase in quantity explain, /* Style Definitions */ ...

/* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-prior

Survivor Island, the central economic problem facing the group of survivors...

the central economic problem facing the group of survivors

Particular capabilities and resources, The resource based model identifies...

The resource based model identifies four criteria that firms can use to evaluate whether particular resources and capabilities are core competencies and can therefore, provide a ba

Balance of payments, factors that causes the shifts in balance of payments...

factors that causes the shifts in balance of payments

Opportunity set, constructing a opportunity set and budget line for $15 lot...

constructing a opportunity set and budget line for $15 lottery ticket and intending on buying a candy bar for $0.75 and peanut bag for $1.50

What are the important tools to consider monetary policy, What are the impo...

What are the important tools to consider Monetary Policy? Important tools to consider Monetary Policy: a. What the money demand curve is b. Why the liquidity preference m

Determination of C - Im and NT, Once Y is determined, almost all of the oth...

Once Y is determined, almost all of the other variables are determined since they are either exogenous or they depend on Y. From Y we can determine C by consumption function, I m

The circular flow of income in a closed economy, The circular flow of incom...

The circular flow of income in a closed economy   A closed economy exists when there is no international trade. We shall also assume that in this particular closed economy there

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