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DaniilM [7]
3 years ago
10

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:

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

  1. Goods whose quantity demanded remains stable irrespective of the change in price (in percentage terms), have perfectly price inelastic demand.  
  2. Goods whose quantity demanded changes less (in percentage terms) then the change in their price (in percentage terms), have relatively price inelastic demand.
  3. Goods whose quantity demanded disappears with even a negligible change in price (in percentage terms), have perfectly price elastic demand.
  4. 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 <u>necessity</u> like bread are <u>relatively price inelastic.</u> <u>Luxury goods</u>, on the other hand, have <u>relatively price elastic demand</u>. 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.

<u>As mentioned in the question, demand for luxury goods whose purchase would exhaust a big portion of one's income is </u><u>relatively price elastic. </u><u>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).</u>

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denpristay [2]

One thing that a process cost system cannot be used for from the given options is Motion pictures.

<h3>What is process costing?</h3>

This is a method of allocating cost that is based on the same item being mass-produced such that there is no discernable difference between the goods that were produced.

Motion pictures cannot be mass produced which is why they cannot use process costing, Every motion picture is unique and so something more specific is needed to apportion their cost.

Find out more on process costing at brainly.com/question/17129908

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In 2019, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The
Lady_Fox [76]

Answer:

FUTA tax due from the corporation is $108

 

Explanation:

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Paid under State Unemployment Tax by the employer is = (7000+7000+4000) x 5.40% =$972

How much FUTA tax is due from Willow Corporation for 2019?

Credit of tax paid in State Unemployment Tax is availabe for FUTA tax of 6%, thus FUTA due will be:

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3 years ago
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Explanation:

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Explanation:

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