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2 years ago

Suppose pizzas and burgers are substitutes. if the price of pizza increases, what happens in each market?

1 answer:

8 0

If the price of pizza increases, Move upward and to the left along the demand curve for pizzas and the demand curve for burgers shifts to the right.

<h3>What is Demand curve?</h3>

A demand curve is a graph that shows the relationship between the cost of a given good and the amount that is desired at that cost. Demand curves can be applied to the price-quantity connection for either a specific consumer or for every consumer in a given market.

The relationship between the cost of an item or service and the quantity demanded over a specific time period is represented graphically by the demand curve. The price and quantity demanded are often represented with the price on the left vertical axis and the horizontal axis, respectively.

Pizzas and burgers exist as substitutes. This implies that they are utilized in place of each other. If the price of pizza increases, the quantity demanded will decrease. This will be characterized by an upward movement to the left on the same demand curve.

Consumers will prefer a more affordable substitute, and as a result, the demand for burgers will increase. This will be displayed by a rightward shift in the demand curve for burgers..

Hence, if the price of pizza increases, Move upward and to the left along the demand curve for pizzas and the demand curve for burgers shifts to the right.

To learn more about Demand curve refer to:

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Lincoln electric believes in a highly motivated and highly skilled workforce. they choose to pay their employees based on produc

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They use a <span>Straight Piecework Plan </span>as an incentive to their employees.
The Straight Piece-Work System is the simplest incentive approach in which the rate in keeping with unit of output is fixed, and the income of the employee are computed with the aid of multiplying his total output by rate per unit. We can also define this as the system or plan in which the employers or workers are paid according to the number of units produced during a defined time period at fixed rate.

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3 years ago

Suppose that the reserve ratio is 10% when the Fed sells $25,000 of U.S. Treasury bills to the banking system. If the banking sy

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Answer:

d $250,000; subtracted from

Explanation:

Sales of U.S. Treasury bills to the banking system by the Fed is a contractionary monetary policy that will reduce the money supply.

Based on the money supply multiplier, the amount of the reduction in money can be calculated as follows:

Amount of reduction in money supply = $25,000 / 10% = $250,000.

Therefore, if the banking system does NOT want to hold any excess reserves, <u>250,000</u> will be <u>substracted from</u> the money supply.

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3 years ago

The Saunders Investment Bank has the following financing outstanding. Debt: 120,000 bonds with a coupon rate of 8 percent and a

algol [13]

Answer:

R_Wacc = 11,35% (48%) + 8,57% (4%) + 4,18% (35%) + 3,59% (13%) = 7,70%

Explanation:

Re: 11,35% Cost of Common Equity

Re: 8,57% Cost of Preferred STOCK

Re: 4,18% Cost of Debt BONDS

Rd: 3,59% Cost of Zero BONDS

Equity :

$179,200,000 Market Value of the firm's Common Equity

Preferred Stock:

$14,700,000 Market Value of the firm's Preferred STOCK

Debt bonds :

$132,000,000 Market Value of the firm's Debt BONDS

Zero bonds :

$49,300,000 Market Value of the firm's ZERO BONDS

V: $375,200,000 E+D = Total Market Value of the firm's financing

E/V: 48% Percentage of financing that is Common Equity

PS/V: 4% Percentage of financing that is Preferred Stock

DB/V: 35% Percentage of financing that is Debt Bonds

ZB/V: 13% Percentage of financing that is Zero Bonds

Tc: 40% Corporate tax rate

Total Market Value

Market value of debt Bonds:

120,000 x $1,000 x 110% = $132,000,000

Market value of debt Zero Coupon:

290,000 x $1,000 x 17% = $49,300,000

Market value of preferred stock:

210,000 x $70 = $14,700,000

Market value of common stock:

3,200,000 x $56 = $179,200,000

TOTAL = $375,200,000

Using the CAPM model we can calculate the costo of equity:

R = 0,04 + 1,05(0,07) = 11,35%

The cost of debt is the YTM of the bonds, so:

P0= $1,110 = $40(PVIFAR%,40) + $1,000(PVIFR%,40) =

R = 6,97%

The aftertax cost of debt is:

R_Bonds : (1 - 0,4) x (0,0697) = 4,18%

The aftertax cost of zero coupon bonds is:

Yield To Maturity = (Face Value/Current Bond Price)^(1/Years To Maturity)−1 = 5,98%

(Face Value/Current Bond Price) = '$1,000/$175 (1/Years To Maturity) = 1/30

The aftertax cost of debt is:

R_ZeroB : (1 - 0,4) x (0,0598) = 3,59%

We can use the preferred stock pricing equation, which is the level perpetuity equation, so the required return on the company’s preferred stock is:

Rp= D1/P0 = $6/$70 = 8,57%

Rp = Required Return D1 = Dividend P0 = Price

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3 years ago

The production head at the Omnitone Paint Company would frequently stay back after office hours and experiment with new color co

Lady bird [3.3K]

Answer: Emergent Strategy

Explanation:

An emergent strategy is an approach to take action not stated or planned in the initial stage but emerges and develops with time in an organization during an ongoing project as the organisation changes and advances.

This realized strategy helps to identify unforeseen circumstances that arises during implementation of task and therefore the organisation will have to incorporate the result from new strategy which will be beneficial in the long run especially for future purposes.

Here in Omnitone organisation, the coming up with new colors during experimenting with colors which became popular showed implementation of emergent strategy.

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3 years ago

A firm practicing group price discrimination that has constant marginal cost will ________.

siniylev [52]

Answer:

C. maximize total profit by maximizing profit for each group separately

Explanation:

Price discrimination is when a seller sells the same quantity and quality of goods and services to different groups of consumers at different prices.

Price is usually set higher than marginal cost for a price discriminator.

I hope my answer helps you.

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3 years ago