The relationship between quantity supplied and price is _____, and the relationship between quantity demanded and price is _____
.
1 answer:
Answer:
Direct
Inverse
Explanation:
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The relationship between quantity supplied and price is direct because the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied. This results in an upward sloping supply curve.
the relationship between quantity demanded and price is inverse because the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded. This explains why the demand curve is downward sloping.
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Answer:
The second project should be chosen. Because the present value of the second project is greater than that of the first project.
Explanation:
The project that should be chosen can be determined by comparing the present value of both projects.
Present value is the cash flows from a project discounted at the discount rate.
Present value can be found using a financial calculator;
For project 1,
Cash flow each year from year one to six is $52,000
Discount rate = 15%
Present value =$196,793.10
For project 2,
Cash flow each year from year one to eight is $48,000
Discount rate = 15%
Present value =$215,391.43
The second project would be chosen because its present value is greater than that of the first project.
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