Answer:
Option B is correct.
Explanation:
In order to answer this question correctly, we first need to understand the law of demands.
Law of demands: It says that the relationship of price and quantity demanded is inversely proportional. It means if the price of a particular product goes high, then the quantity of demand will be reduced. Similarly, if the price of the product is low then the quantity of demanded will be higher.
Here,
Option B is the most relevant to the Law of Demand which says that Kathleen eats more steak when the price is low. It means when the price is low, the quantity of steak demanded is higher in Kathleen's case. Furthermore, Kathleen eats less when the price is high. It means, when the price of steak is higher then the quantity of steak demanded from Kathleen is low.
Hence, Option B is the correct option which fulfills the law of demand.
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Answer: a. 11.5%
Explanation:
Fad followers are those investors who follow a trend when it emerges and as such their betas will be less than that of informed traders because the informed traders would have acted first.
Using the Capital Asset Pricing Model to calculate expected return.
Er = Rf + b( Rm - Rf)
Er = Expected return
Rf = Risk Free Rate
b = Beta
Rm = Market Return.
The Expected Return for the Informed Investors is,
= 4% + 1.4 ( 10% - 4%)
= 4% + 1.4 ( 6%)
= 12.4%
With the Fad followed expected to have a lower beta and therefore a lower expected return than the Informed Investors, the only suitable option is the 11.5%.
Answer:
For twig stands= 24 units.
For oak stand = 6 units.
Explanation:
From the question above we are given that the Sale price for Twig and Oak plant stand are 15.00 and 42.00. We are also given that the Variable cost for Twig and Oak plant stand are 2.00 and 19.00 per unit. Thus, the value for the Contribution Margin per unit can be calculated by just subtracting Variable cost for Twig and Oak plant stand from Sale price for Twig and Oak plant stand, that is;
Contribution Margin per unit = (Sale price for Twig and Oak plant) - (Variable cost for Twig and Oak plant stand).
Contribution Margin per unit for Twig = 15.00 - 2.00 = 13.00 and the Contribution Margin per unit for oak = 42.00 - 19.00 = 23.00.
From the question, we are given that the Sales mix in units is 4(twig) and 1(oak) = 4 + 1 = 5.
Thus, the contribution margin for twig = sales mix for twig × Contribution Margin per unit for Twig = 4 × 13 = 52.
Also, the contribution margin for oak = sales mix for oak × Contribution Margin per unit for oak = 1 × 23 = 23.
Total = 52 + 23 = 75.
Hence, the Weighted Average Contribution per unit = 75 / 5 = 15.
Total Break even Sales = 450/15 = 30 units.
Thus, for twig stand; 30 × 4/5 = 24 units.
For oak = 30 × 1/5 = 6 units.
