The quantity of coffee sold fell sharply last month, while the price remained the same. Five people suggest various explanations
:Lorenzo: Supply decreased, but demand was unit elastic.Neha: Supply decreased, but it was perfectly inelastic.Sam: Supply decreased, but demand was perfectly elastic.Teresa: Demand decreased, but supply was perfectly elastic.Andrew: Demand decreased, but supply decreased at the same time.Who could possibly be right? A) LorenzoB) NehaC) SamD) TeresaE) Andrew
1 answer:
Answer:
Sam: Supply decreased, but demand was perfectly elastic.
Explanation:
Sam is right because the only possible explanation is that the demand is perfectly elastic and the supply decreased. When the price elasticity of demand is perfectly elastic, the demand curve is completely horizontal. Since the price of coffee remained the same, that means that the quantity demanded will decrease only if the supply of coffee decreased.
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Answer:
1. Total interest rate is $166,790
2. Refer to the attached file for the straight-line amortization table for the bonds' life.
3.
To record interest rate paid in 30th June 2018:
Dr Interest expenses 16,679
Dr Premium on bond payable 4,521
Cr Cash 21,200
To record interest rate paid in 31st Dec 2018:
Dr Interest expenses 16,679
Dr Premium on bond payable 4,521
Cr Cash 21,200
Explanation:
Total interest rate as followed : Interest payment - Premium on bond payable = 530,000 x 8% /2 x 10 - (575,210 - 530,000) =166,790.
