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1 year ago

If demand for a good is extremely elastic, raising the price of that good typically has what effect on total revenue?.

1 answer:

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If demand for a good is extremely elastic, raising the price of that good typically has what effect on total revenue--- decreases

If demand is elastic at a given price level, then should a company cut its price, the percentage drop in price will result in an even larger percentage increase in the quantity sold—thus raising total revenue. However, if demand is inelastic at the original quantity level, then should the company raise its prices, the percentage increase in price will result in a smaller percentage decrease in the quantity sold—and total revenue will rise.

Demand elasticity :

Demand elasticity is the change in quantity demanded per change in a demand determinant. Although there are several demand determinants, such as consumer preferences, the main determinant with which demand elasticity is measured is the change in price. Businesses are particularly interested in price elasticity, since it measures by how much total revenue changes with the price.

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2 years ago

Imperial Jewelers manufactures and sells a gold bracelet for $403.00. The company’s accounting system says that the unit product

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a) Financial advantage  $2,208 

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Explanation:

The relevant costs for decision to accept the special order are

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2. incremental variable cost

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Variable cost of special order

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Cost of special tool (454)

Financial advantage  2,208 

The company should accept the special order, as it will increase its profit by $2,208

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2 years ago

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakesfor $1.00 each. What is the opportun

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D) $1.00

Explanation:

Opportunity cost is the next best option forgone when one alternative is chosen over other alternatives.

If I buy a cappuccino, I have forgone the opportunity to buy Russian tea cakes. Therefore, my opportunity cost is the price of Russian tea cakes.

I hope my answer helps you.

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2 years ago

Sophia is an architect and she is trying to decide whether to hire Jacob, a draftsman, to assist with her work. Sophia could hir

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b. Jacob should be hired at the $20 per hour wage rate

Options

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b. Jacob should be hired at the $20 per hour wage rate

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d. Jacob should be hired, but only if he is paid more than $30 per hour

Explanation:

Sophia cannot fullfil their client request on time without hiring an employee Assuming Jacob is the best possible candidate for Sophie she should consider to hire it as three hours of Jabor will cost 60 dollars while an hour of his work is worth 90 dollars

Thus, making convinient to hire it as there is a profit of 30 dollars.

We should also conider jacob will earn experience over time and this will make it a better employee in the long-run.

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3 years ago

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2 years ago

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