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lisov135 [29]
3 years ago
10

If the price elasticity of demand is 1.8 then a 30 percent decrease in the price of the good will lead to a _______ percent incr

ease in the quantity demanded.
Business
1 answer:
Mkey [24]3 years ago
3 0

Answer:

The answer is 54percent

Explanation:

Elasticity is a measure of how sensitive one variable is to any variable. It is expressed as the ratio of percentage changes in variables.

That is; %change in quantity demanded/%change in price.

This calculation shows how sensitive quantity demanded is to a change in price.

In the question, price elasticity of demand is 1.8

30 percent decrease in price

Therefore, the quantity demanded will increase by 30percent x 1.8

=54percent

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The answer is C. Score
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3 years ago
The demand and supply functions for basic cable TV in the local market are given as: Calculate the consumer and producer surplus
lana [24]

Answer: Hello your question is poorly written attached below is the complete question

answer:

a) Cs = 800,000 ,  Ps = 1,500,000

b) Cs = 1437500,  Ps = 525,000

Explanation:

Demand function ( Qd ) = 200,000 - 4000 P

supply function ( Qs ) = 20,000 + 2000 P

at equilibrium :  200,000 - 4000P = 20,000 + 2000P

therefore ; P = 180,000 / 6000 = 30

Q = 20,000 + 2000 ( 30 ) = 80,000

<u>a) Determine consumer and producer surplus in the market</u>

consumer surplus ( Cs ) This is the area above the price and below the demand curve  = 1/2 * ( 50 - 30 ) 80,000 = 800,000

producer surplus ( Ps ) This is the area above supply and below price

= 30 * ( 80,000 ) -  1/2 (80,000 - 20,000 ) (30)

= 1,500,000

<u>b) Determine the new levels of consumer and producer surplus with a price ceiling of $15 </u>

Pc (ceiling price ) = $15

Qd = 200,000 - 4000 ( 15 )  = 140,000

Qs = 20,000 + 2000 ( 15 ) = 50,000

∴ New consumer surplus = area ( a , Pc, b, d )

= ( 30 - 15 ) (50,000) + 1/2(50-30) (80,000) - 1/2 (80,000 - 50,000 ) (37.5 - 30)

   = 1437500

New producer surplus = area ( Pc , b, e 0 )

= ( 15 ) ( 50000) - 1/2 ( 50,000 - 20,000 ) (15)

= 525,000

7 0
3 years ago
Kendall Company has sales of 1,000 units at $60 a unit. Variable expenses are 30% of the selling price. If total fixed expenses
Lelu [443]

Answer:

There are several ways to compute the degree of operating leverage (DOL). A fairly intuitive approach is expressed below.

DOL = (sales - variable costs) / (sales - variable costs - fixed costs)

For Kendall, the DOL is computed as follows:

DOL = (1,000 * $60 - 1,000 * $60 * .30) / (1,000 * $60 - 1,000 * $60 * .30 - $30,000) = 3.5

<em>hope this helps</em>

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8 0
3 years ago
Bacchus Enterprises has $12B in book value of common stock selling at a book to market rate of 1.35 and a beta of 1.5. The combi
goldfiish [28.3K]

Answer: 16.3%

Explanation:

Given the details in the question, the cost of preferred capital can be calculated using the CAPM method.

Cost of preferred stock using the Capital Asset Pricing Model is:

= Risk free rate + Beta * ( Market return - Risk free rate)

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7 0
3 years ago
PLS HELP!! Complete the following sentence.<br> Making sales is the primary mission of a sales___
Doss [256]

Answer:

Salesman

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A Salesman, also called a Sales Representative or Salesperson, sells products or services to businesses or consumers. - JH

4 0
3 years ago
Read 2 more answers
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