Answer:
If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.
Explanation:
Perfectly inelastic demand curve indicates the quantity demanded for the life-saving medicine remains the same or does not change in response to a change in price.
Since a part of the law of supply states that the lower the quantity supplied, the higher the price; a reduction in the supply of the life-saving medicine will increase its price.
The combining effect of the two above will lead to an increase in the equilibrium price while the equilibrium quantity will remain the same as it will not respond to the change in price.
The attached graph explains this more clearly. In the graph, the demand curve DD is used to represent the perfectly inelastic demand curve for the life-saving medicine. Therefore, the quantity remains at q no matter the changes, either increase or decrease, in price. Movement from the supply curve S1 to S2 indicates a reduction in supply of the life-saving medicine which causes an increase in the equilibrium price from Po to P1 while the equilibrium quantity stays at q.
This therefore shows that if the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.
Answer:
$3,750
Explanation:
Cost of patent $45,000
Useful Life 12
Amortization Expense for 2nd year =$3,750 (45,000/12)
Amortization Expense-Patent Dr.$3,750
Accumulated Amortization-Patent Cr.$3,750
Answer:
50
Explanation:
Calculation to determine How many Number of Salespeople does Wally need to adequately sell waterslides
Using this formula
Number of Salespeople=(Number of customers*Calls necessary*Hours per call)/Average selling time available per year
Let plug in the formula
Number of Salespeople= (6000* 5 * 1.5 hours per call) / 900 hours
Number of Salespeople= 45,000 / 900
Number of Salespeople=50
Therefore Number of Salespeople that Wally need to adequately sell waterslides is ,50
Answer: b. The diversifiable risk of your portfolio will likely decline, but the expected market risk should not change.
Explanation:
Diversifiable risk is a risk that a particular security has or which can be seen in a certain sector. Market risk occurs when there's possibility that a particular investor will make loss due to certain factors which affects the entire market.
In the above scenario, the most likely to occur will be that the diversifiable risk of the portfolio will likely decline, but the expected market risk should not change.
It should be noted that diversification won't eliminate market risk. When more stocks are added, this brings about decline in diversification risk but market risk won't change.