Firms will generally make-to-order when the demand for goods is not stable.
<h3>What is Make to order?</h3>
Make to order (MTO) is a production process that involves a customer ordering a specific products which is usually different from the general products.
The products may be customized and its usually done when a company has less demand or work.
Therefore, Firms will generally make-to-order when the demand for goods is not stable.
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Answer:
A
Explanation:
Gross profit = total sales - total cost of sales
Answer:
Consumer surplus increases by $2
Explanation:
The consumer surplus can be defined as the benefit that consumers gain when they pay less for a good that they are willing to pay more for.
a). Determine the final demand as follows;
Price elasticity of demand=% change in price/% change in demand
where;
price elasticity of demand=-1
% change in price={(Final price-initial price)/initial price}×100
Final price=$24
initial price=$25
% change in price=(24-25)/25=(1/25)×100=-4%
% change in demand=x
replacing in the original expression;
-1=-4/x
x=4%
% change in quantity={final quantity-initial quantity/initial quantity}×100
let final quantity=y
4%={(y-100)/100}×100
0.04=(y-100)/100
4=y-100
y=4+100=104
final quantity=104 units
Consumer surplus=(1/2)×change in price×change in quantity
where;
change in price=25-24=1
change in quantity=104-100=4
Consumer surplus=(1/2)×1×4=2
Consumer surplus increases by $2
Answer:
B. Price promotion
Explanation:
Ashton by trying to create awareness in his new branch, he is planning to cut price and offer coupons so as to persuade customers to purchase from him. The practice is known as price promotion.
Price promotion is the combination of two words "price" and "promotion".
Price refers to the amount of money paid by consumers to purchase goods and services.
Promotion on the other hand refers to activities that persuade the consumers to buy a product and communicate the product’s features and benefits.
Combining the two definitions, pro promotion refers to a discount in price which will encourage consumers to purchase a product.
