If the economy's income rises, the price of a normal good like a trumpet will rise and the quantity will increases.
If the number of trumpet producers on the market increases, this means that there will be an increase in supply, which can mean greater availability of these goods and, consequently, a reduction in price.
In a situation where there are few substitutes for trumpets, demand will be relatively inelastic, as consumers are not as sensitive to price changes due to low availability.
<h3 /><h3>What is the law of supply and demand?</h3>
They are economic concepts related to the quantity of a good available in the market and its price, which are determined by the law of supply and demand, impacted by economic forces, such as income, producers, and policies for example.
Therefore, the greater the supply than the demand, the lower the prices, and the lower the supply, the higher the prices.
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Answer:
the after-tax cost of debt is 13.24
Explanation:
The after-tax cost of debt is the initial cost of debt as a result of the incremental income tax rate.
The after-tax cost of debt is dependent on the incremental tax rate of a business. If profits are low, a business would pay low tax rate, which means that the after-tax cost of debt will increase. Also, if the business profits increase, they would pay higher tax rate, so its after-tax cost of debt will decline.
Given that:
Required return (r) = 11.50% = 0.0115
The yield on a 20-year treasury bond (y) = 5.50% = 0.055
beta (b) = 1.29
rs = y + (r -y) x b
after-tax cost of debt = 5.50% + (11.50% - 5.50%) x 1.29
after-tax cost of debt = 13.24%
Specialization benefits buyers and sellers. Focusing on a limited number of related products or services allows them to use capital and labor more efficiently.So , buyers get better products at lower price and sellers sell more products and they manufacture more products at lower costs.