1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
djyliett [7]
3 years ago
14

Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for both markets is the sa

me, the equilibrium price is
$
6.50
, and the equilibrium quantity is
27.0
. When the price is
$
10.75
, the quantity supplied of motorcycles is
61.0
and the quantity supplied of pancakes is
109.0
. For simplicity of analysis, the demand for both goods is the same.
Business
1 answer:
Taya2010 [7]3 years ago
5 0

Answer:

1. PES for pancakes is 2.45

2. Supply in the market for motorcycles is  less elastic than supply in the market for pancakes.

Explanation:

Hi :)

I feel like part of the question is missing but i was able to find it elsewhere and show you:

1. How to calculate PES using mid-point formula

2. PES for both motorcycles and pancakes

3. Which is more elastic

...

Price elasticity of supply is the responsiveness of quantity supplied to a change in price. it is calculated by dividing the % change in quantity supplied by the % change in price. Generally, it can be of two types:

Price Elastic: Change in quantity supplied is higher than change in price. PES > 1

Price Inelastic: Change in quantity supplied is lower than change in price. PES < 1

When calculated using the mid-point formula, this is the formula used:

<u>(Q2 - Q1) / [(Q2 + Q1)/2]  </u>

(P2 - P1) / [(P2 + P1)/2]

1. We will now substitute the actual values of pancakes in place after identifying them from the question:

Equilibrium Quantity - 27 (Q1)

New Quantity - 109 (Q2)

Equilibrium Price - $6.50 (P1)

New Price - $10.75 (P2)

<u>(109 - 27) / [(109 + 27)/2] </u>

(10.75 - 6.50) / [(10.75 + 6.50)/2]

<u>1.21 </u>

0.493

Therefore, PES for pancakes is 2.45 (approx. two decimal places) suggesting it is price elastic.

2. In order to check whether motorcycles or pancakes are more elastic, we calculate the PES of motorcycles using the same method:

Equilibrium Quantity - 27 (Q1)

New Quantity - 61 (Q2)

Equilibrium Price - $6.50 (P1)

New Price - $10.75 (P2)

<u>(61 - 27) / [(61 + 27)/2] </u>

(10.75 - 6.50) / [(10.75 + 6.50)/2]

<u>0.77 </u>

0.493

Therefore, PES for motorcycles is 1.56 (approx. two decimal places) suggesting it is price elastic. However, it is less price elastic than PES for pancakes.

One reason for this could be production time. Pancakes can be produced much faster than motorcycles. Therefore, it is more flexible to price changes.

You might be interested in
You are advising a local nonprofit on strategy. The nonprofit supports cancer research and relies entirely on donations. You rec
Aleksandr [31]

Answer:

E). Use inexpensive digital marketing tools to inform the community about an upcoming fundraising event.

Explanation:

The 'use of inexpensive digital marketing tools for informing the community regarding the approaching fundraising event' would be the most appropriate and feasible for the non-profit organization as it would be the most reasonable for the firm. A big-budget expense on marketing the event would neither be affordable due to the small budget nor beneficial for such an organization. Thus, using inexpensive digital marketing would publicize the event on an affordable budget and prove helpful in gathering good collections in the event. Hence, <u>option E</u> is the correct answer.

5 0
3 years ago
In March 2018, Daniela Motor Financing (DMF), offered some securities for sale to the public. Under the terms of the deal, DMF p
kiruha [24]

Answer:

The rate of return is 7.20%

Explanation:

a)  Assuming you purchased the bond for $880, in order to calculate the rate of return you earn if you held the bond for 25 years until it matured with a value $5,000 we would have to calculate the following formula:

Rate of Return = [FV/PV]1/n - 1

Rate of Return= [$5,000 / $880]1/25 - 1 = [5.6818]0.04 - 1 = 1.0720 - 1 = 0.0720, or 7.20%

Rate of Return= [5.6818]0.04 - 1

Rate of Return= 1.0720 - 1

Rate of Return=0.0720, or 7.20%

The rate of return is 7.20%

5 0
2 years ago
The following are selected 2020 transactions of Astin Corporation. Sept. 1 Purchased inventory from Encino Company on account fo
masya89 [10]

Answer:

inventory  50,000 debit

    accounts payable    50,000 credit

--to record purchase of goods--

accounts payable 50,000 debit

      notes payables      50,000 credit

--to record teh issued promissory note to setle the account--

cash                                  50,000 debit

discount on note payable 4,000 debit

  notes payable                            54,000 credit

--to record the discounted note--

Explanation:

a)  we record the purchase as always.

b) we are trading a liability for another. We do not receive for the note.

c) we discount on the note and we are goind to declare the interest expense at maturity or year-end against this discount.

5 0
3 years ago
Which 3 types of customer statements can QuickBooks Online generate?
Phantasy [73]

Answer:

beg8ner ine expert one explorer ine is types of it

8 0
2 years ago
The common stock of Shaky Building Supply has a beta that is 22 percent greater than the overall market beta. Currently, the mar
Bess [88]

Answer:

11.7%

Explanation:

The common stock of a shaky building has a beta of 22%

The market risk premium is 9.56%

The US treasury bill is 3.3 %

Therefore the cost of equity can be calculated as follows

= 3.3/100 + (1+22/100)(9.56)

= 0.033 + (1+0.22)(9.56)

= 0.033 + 1.22×9.56

= 0.033 + 11.6632

= 11.7%

5 0
2 years ago
Other questions:
  • . A small consulting firm has an overhead rate of 160% of direct labor charged to each job. The materials cost (including travel
    5·1 answer
  • 1. Assume that Bob Burn, a CEO of Global Foods, Inc. asks his board of directors to approve a decision to enter the soft drink b
    9·1 answer
  • ________ is the denial of opportunities and equal rights to individuals and groups within the normal operations of a society.
    9·1 answer
  • Marriott International, Inc., is a leading global lodging company, with more than 6,000 properties in 122 countries. Information
    8·1 answer
  • The price of a certain property increased by 10% in the first year, decreased by 20% in the second year, and increased by 25% in
    14·1 answer
  • Ricardo works part time at a local computer store. One day, his manager approaches him about moving from cashier to floor superv
    14·1 answer
  • With the Likert scale, it is best to use "flat" or plain statements and let the respondent indicate the intensity of his or her
    11·1 answer
  • River corp's total assets at the end of last year were $480,000 and its net income was $32,750. what was its return on total ass
    6·1 answer
  • ____ 16. a decrease in the price of domestically produced nuclear reactors will be reflected in
    12·1 answer
  • Imagine that you are serving as the general manager of a hotel. What three aspects do you think would be most important to the s
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!