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3 years ago

The demand for a luxury good whose purchase would exhaust a big portion of one's income is

Business

1 answer:

stira [4]3 years ago

5 0

Answer:

Relatively price elastic

Explanation:

Price elasticity is defined as the percentage change in quantality demanded with respect to percentage change in price. Lets explore it in detail.

Goods whose quantity demanded remains stable irrespective of the change in price (in percentage terms), have perfectly price inelastic demand.
Goods whose quantity demanded changes less (in percentage terms) then the change in their price (in percentage terms), have relatively price inelastic demand.
Goods whose quantity demanded disappears with even a negligible change in price (in percentage terms), have perfectly price elastic demand.
Goods whose quantity demanded changes more (in percentage terms) then the change in their price (in percentage terms), are relatively price elastic.

Perfectly inelastic goods are the ones which have no substitute for example oxygen. If firms start selling us oxygen, we will have no other option except to buy it. Perfectly elastic goods have lots of substitute. So if the price of a product increases with minimal amount, the consumer will shift to its substitutes.

Items that are considered necessity like bread are relatively price inelastic. Luxury goods, on the other hand, have relatively price elastic demand. Let’s see an example.

Bread is a necessity as it is a staple food. If the price of bread increases from $1 to $2 (100% increase), the consumption will not drop significantly. Instead a person having three meals a day, might come to two meals (33% decrease). Hence demand for bread is relatively price inelastic.

As mentioned in the question, demand for luxury goods whose purchase would exhaust a big portion of one's income is relatively price elastic. Since it takes a large share of wallet, a slight increase in price will discourage the consumer to spend on it at all (it's not a need so why bother spending).

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Which of the following is an example of long-term debt?

GarryVolchara [31]

Home equity loan is an example of long term debt among the choices provided in the question. The correct option among all the options that are given in the question is the last option or option "d". Long term debts are the type of debts that are not needed to be paid within a years time. I hope this helps.

6 0

3 years ago

Millie Woods owns and operates a World of Food grocery store. Although her store is independently owned and operated, she has si

trasher [3.6K]

Answer:

wholesaler-sponsored chain.

Explanation:

Based on the information provided within the question it seems that Millie Woods' store is part of a wholesaler-sponsored chain. This refers to the voluntary union of a large quantity of independent stores or organizations into a single chain in order to be able to compete against large organizations. Which is what Millie accomplished by signing agreements with over seventy stores to work in unison.

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3 years ago

Joe's Quik Shop bought equipment for $25,000 on January 1, 2006. Joe estimated the useful life to be 5 years with no salvage val

lora16 [44]

Answer:

The correct answer is D. $5,000

Explanation:

Please remember that 3 inputs we need to remember when it comes to depreciation expense calculation is (1) Original cost, (2) Salvage value & (3) Expected useful life.The annnual depreciation expense is caluclated as below:

Depreciation expenses = (Original cost - Salvage value)/Expected useful life

Putting all the number together, we have:

Depreciation expenses = (25,000 - 0)/5 = 5,000.

So the correct answer is D. $5,000

8 0

3 years ago

BestCare Health Plan has received a request from a state insurance department in connection with the investigation of several ma

Mumz [18]

In the case above, BestCare response is to cooperate with the state and supply requested information.

<h3>What is health plan?</h3>

A health plan is known to be a kind of plan that is made for employee welfare benefit and it is often set up or kept by an employer or by an employee firm or both, that gives medical care for its participants.

Note that, In the case above, BestCare response is to cooperate with the state and supply requested information.

Learn more about state insurance from

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7 0

2 years ago

Last year you paid $24 for a round of golf and $12 to rent a golf cart. This year it cost you $30 to golf and $15 to rent a cart

Fantom [35]

Answer:

Price index = 125

Explanation:

Given:

Last year paid $24 for a round of golf and $12 to rent a golf cart.

This year it cost you $30 to golf and $15 to rent a cart.

Question asked:

Based on this simple basket of goods, calculate a price index for this year using last year as the base year.

Solution:

Total cost of last year = For a round of golf + Rent of a golf cart

= $24 + $12 = $36

Total cost of this year = $30 + $15 = $45

Now, we will find price index for this year by using last year as the base year.

As we know:

$Consume\ Price\ Index =\frac{Current\ Period\ Price\ of\ the\ Basket}{Base\ Period\ Price\ of\ the\ Basket} \times100$

$=\frac{45}{36} \times100=\frac{4500}{36} =125$

Thus, price index for this year using last year as the base year is 125

8 0

3 years ago