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3 years ago

Explain how a rise in the price level affects aggregate quantity demanded with the:

Business

2 answers:

luda_lava [24]3 years ago

8 0

Answer:

d) The money people hold in cash is worth less, which decreases spending.

Explanation:

When there is a rise in price level the value of cash people are holding reduces, this reduces the purchases of goods and services because the purchasing power of money has reduces, making buyers to buy less. To keep the value constant, people withdraw more from their banks, this reduces the amount banks have to lend, leading to higher interest rates and lower investment expenditures.

On the other hand, as the price level falls, the purchasing power of money rises, and the money in the bank account have more value and in turn making account holders to become wealthier, this makes buyers to be willing to buy more.

I am Lyosha [343]3 years ago

3 0

Answer:

Option "A" is correct.

Explanation:

The fall in wealth rate reduces demand.

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Consider firms that introduce new products, such as DVDs in 2001. When firms introduce new products, how do they typically det

lyudmila [28]

Answer:

D. estimate price elasticity of demand by experimenting with different prices.

Explanation:

Price elasticity of demand is an economic concept which is a measure of the sensitivity of customers willingness to buy something to its price. If the customers readily change their buying behavior with a change in price of the product, it would mean that the demand for the product is elastic.

When firms are introducing new products, they generally determine the best selling price by experimenting with different prices and observing the buying behavior of customers. Then the choose the price which produces the maximum amount of revenue for the firm, which entails the price of the product and number of units sold.

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3 years ago

The following transactions occurred during 2014. Assume that depreciation of 10% per year is charged on all machinery and 5% per

serg [7]

Answer:

Here are your general entries:)

Profit and loss account $19,800

Accumulated depreciation $112,200

To Building $132,000

( Building torn down recorded)

Building torn down expense $5,100

To cash $5,100

(paid to contractor)

Cash $2,100

Accumulated depreciation $11,200

Profit and loss account $1,900

To machinery $16,000

(disposal of machine recorded)

Freight expense $300

To cash $300

(freight paid recorded)

Repairs of machinery $2,000

To cash $2,000

(New gear brake added to machinery)

Profit and loss account $1,400

Accumulated depreciation $2,100

To old base $3,500

(old base expensed out)

Machinery account $5,500

To cash $5,500

(New base constructed)

Depreciation of base $550

To accumulated depreciation $550

Paint of building expense $6,900

To cash $6,900

Explanation:

Addition of gear brake not added to cost of machinery because it does not extend the useful life of machine.

4 0

3 years ago

In 2010, bad freezes destroyed a large portion of Florida's grapefruit crop. Explain what happened in the grapefruit market usin

lutik1710 [3]

Answer: Please refer to Explanation

Explanation:

The Grapefruit market will experience an acute shortage of grapefruits because the bad freeze destroyed most of the crop that was going to be supplied.

This shortage in supply will force the price up and therefore lead to a drop in Demand as a lot of people will decide that they can't spend the new amount.

This scenario would lead to an increase in the Equilibrium price because the supply curve will be forced to the left and the new intersect with the Supply curve will be higher. The Equilibrium Quantity will also reduce because of the shortage that is being experienced as a result of a large portion of the grapefruits being destroyed.

In the graph I attached, S2 refers to the supply curve AFTER the bad freezes. Notice how the price went up to P2 and the Quantity dropped to Q2.

If you need any clarification do comment. Cheers.

8 0

3 years ago

The New American Enterprise Mutual Fund's portfolio is valued at $120,000,000. The fund has liabilities of $4,000,000, and the i

sasho [114]

Answer:

e. $20

Explanation:

The net asset value (N) for The New American Enterprise Mutual Fund's portfolio is given by the funds total value ($120,000,000) subtracted by its liabilities ($4,000,000) and then divided by the number of shares issued (5,800,000) .

$N = \frac{\$120,000,000-\$4,000,000}{5,800,000} \\N=\$20$

The fund's net asset value is $20

3 0

3 years ago

A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra

irga5000 [103]

Answer:

For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave.

If the number of male and female buyers is the same, then the best pricing strategy is to offer 2 different microwaves (option 3). One simple and cheap microwave for women and one with auto-defrost for men.

Strategy Revenue Revenue Total Revenue

from men from women from strategy

1. Auto-Defrost $82 $82 $164

Microwave only

at $82

2. Auto-Defrost $148 $0 $148

Microwave only

at $148

3. Simple $131 $66 $197

Microwave at $66,

Auto-Defrost

Microwave at $131

Suppose that, instead of one man and one woman, the market for this microwave consisted entirely of men. For simplicity, you can assume this means that there are two men, and no women. Under these conditions, pricing strategy <u>2. Auto-Defrost Microwave only at $148</u> would maximize revenue for the manufacturer.

7 0

3 years ago