Which of the following correctly describes how price adjustments eliminate a shortage?
1 answer:
Answer:
As the price rises, the quantity demanded decreases and the quantity supplied increases.
Explanation:
When a shortage occurs, demand for a product is high and is not being matched by supply (supply is low).
So to bring demand down and increase supply, we need to increase the price.
According to the law of demand and increase in price results in a decrease in demand.
The law of supply states that when price increases there will be an increase in supply, making more goods available and eliminating shortage.
This is illustrated in the attached diagram.
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Answer: $2.78
Explanation:
Average variable cost is calculated by dividing the total variable cost of producing a certain number of units of a good by that same number of units.
Average variable cost = Variable cost of producing 18 sneakers / 18
= 50 / 18
= 2.7778
= $2.78
Answer:
Ruby should go to college.
Explanation:
Ruby is currently 50 years old and earning $50,000 per year.
She would like to retire at 67.
She is thinking of going back to college, to complete a graduate degree.
After completing a graduate degree from the college she would earn $55,000.
The total cost of a graduate degree is $75,000.
Ruby still has 17 years to work and earn.
Her income will increase by $5,000 after college
The increase in income earned after college until retirement
= $5,000 17
= $85,000
Since the increase in income is greater than the cost of going to college, Ruby should go to college.