<span>The main problem at Bond's Gym is excess demand. This means that negative incentives are the best way to go. Positive incentives would only increase demand at the gym, making the problem worse. however, negative incentives would create a positive result for the owner, as he would make more money and expand his gym, allowing him to meet more consumer demands.</span>
Answer:
C) defensive
Explanation:
Defensive stocks are stocks that generally perform well during economic recessions. In other words, their price is not related to the market tendency. Even if the market goes down, their price remains stable. Generally companies that sell products with a constant demand are considered defensive stocks, e.g. Costco, Target, Walmart, utilities (all, electric, gas, water), etc.
Answer:
$20,000
Explanation:
Calculation for Sweet's economic profit
First step is to calculate the Explicit Costs
Using this formula
Explicit Costs = Rent on building +Payment of Salary to employees + Utilities + Goods bought
Let plug in the formula
Explicit Costs = ($30,000)+ ($40,000) + ($20,000) +($10,000)
Explicit Costs =$100,000
Last step is to calculate Sweet's economic profit
Using this formula
Economic profit = Total Revenue – (Explicit Costs + Implicit Costs)
Let plug in the morning
Economic profit = $135,000 - $100,000 - $15,000
Economic profit= $20,000
Therefore Sweet's economic profit will be $20,000
Answer:
A
Explanation:
the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = interest rate
g = growth rate
Interest rate used is usually nominal, thus, it increases with inflation rate
We can see that the interest rate is an inverse function of the value, thus when inflation increases, interest rate increases and price declines
Example
d1 = 5
r = 10%
g = 5%
5/ (0.1 - 0,05) = 100
when interest rate increases to 20% as a result of inflation, value becomes
5 / 0.2 - 0.05 = 33.33
value decreased with increase in inflation
