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
NISA [10]
3 years ago
14

In this question, assume that all variables other than price and quantity are held constant.

Business
1 answer:
serg [7]3 years ago
5 0

Answer:

A. The price reduced by 0.115%

B.  Betty can expect her total revenue to increase.

C.  The demand reduced by 43.32%

D. Patty can expect her total revenue to increase.

 Explanation:

A.

The price elasticity of demand can be expressed as shown below;

P.E=%Q/%P

where;

P.E=price elasticity of demand

%Q=percentage change in the quantity demanded

%P=percentage change in price

In our case;

P.E=305

%Q=35%=0.35

%P=unknown, to be determined

Substituting;

305=0.35/P

305 P=0.35

P=0.35/305=0.00115

%P=0.0011×100=0.115%

The price reduced by 0.115%

B.

Determine the initial and final revenue and compare to illustrate if the revenue increased or reduced.

Initial Revenue=initial unit price×initial quantity demanded

where;

Initial unit price=p

Initial quantity=q

replacing;

Initial Revenue=p×q=pq

Final Revenue=final unit price×final quantity demanded

where;

final unit price=(p-0.115% of p)=p-0.00115 p=0.99885 p

final quantity demanded=(q+35% of q)=(q+0.35 q)=1.35 q

Substituting;

Final revenue=(0.99885 p)×(1.35 q)=1.348 pq

Final revenue-Initial revenue=1.348 pq-pq=0.348 pq

Betty can expect her total revenue to increase.

C.

Using the same expression as above;

P.E=%Q/%P

where;

P.E=0.57

%Q=unknown, to be determined=0.01 Q

%P=76%=76/100=0.76

Substituting;

0.57=0.01 Q/0.76

0.01 Q=0.57×0.76

Q=(0.57×0.76)/0.01

Q=43.32%

The demand reduced by 43.32%

D.

Initial Revenue=initial unit price×initial quantity demanded

where;

Initial unit price=p

Initial quantity=q

replacing;

Initial Revenue=p×q=pq

Final Revenue=final unit price×final quantity demanded

where;

final unit price=(p+76% of p)=p+0.76 p=1.76 p

final quantity demanded=(q-43.32% of q)=(q-0.43 q)=0.57 q

Substituting;

Final revenue=(1.76 p)×(0.57 q)=1.0032 pq

Final revenue-Initial revenue=1.0032 pq-pq=0.0032  pq

Patty can expect her total revenue to increase.

 

You might be interested in
Assume that you are a consultant to Lotte Inc., and you have been provided with the following data: D1 = $0.67; P0 = $27.50; and
Eduardwww [97]

The cost of equity from retained earnings based on the DCF approach=9.44%

Explanation:

  • The cost of equity from retained earnings based on the DCF approach can be calculated as follows,
  • For D1  = $0.67
  • For P0 = $27.50
  • For  g = 7.00%
  • Therefore, rs = \frac{D1}{PO} + g
  • The answer is =9.44%

8 0
3 years ago
Presented below are the ending balances of accounts for the Kansas Instruments Corporation at December 31, 2021.
dedylja [7]

Solution :

Current Assets

Cash                                                                     $ 20,000

Accounts receivable                                           $ 1,30,000

Less: Allowance for uncollectible accounts     - $ 13,000

Note receivable                                                    $ 100,000

Interest receivable                                                $ 3,000

Marketable securities                                           $ 32,000

Raw materials                                                       $ 24,000

Work in process                                                   $ 42,000

Finished goods                                                    $ 89,000

Prepaid Rent(Half of $ 60,000)                    <u>      $ 30,000      </u>

Total current assets                                             $ 4,57,000

Current Liabilities

Deferred revenue ($36,000/2)                           $ 18,000

Accounts payable                                                $ 1,80,000

Interest payable                                              <u>     $ 5000           </u>

Total current liabilities                                          $ 2,03,000

Working capital (4,57,000 - 2,03,000)           $ 2,54,000

8 0
3 years ago
Fruit Car Company manufactures 10 fruit themed cars per month. A compact media center is included in each car. Fruit Car Company
Firdavs [7]
The answer for this isss c
3 0
2 years ago
Mary sells two products. She finds that when she promotes one product with a lower promotional price, sales increase for the oth
Marina CMI [18]

Answer:

Cheap

Explanation:

If Mary is selling one product at a lower promotional price then the buyer will think the other products are being sold at a lower price too right?

I may be wrong.......

8 0
3 years ago
How does a market economy operate?
Tanya [424]

Answer:

The principle of market economy dictates that producers and sellers of goods and services will offer them at the highest possible price that consumers are willing to pay for goods or services. When the level of supply meets the level of demand, a natural economic equilibrium is achieved.

Explanation:

5 0
3 years ago
Other questions:
  • The following information pertains to Company A's Year 1 inventory activities:
    11·1 answer
  • What happens to price when the cost of resources rise and falls
    13·1 answer
  • Suppose that the market price for a bottle of vitamins is $2.50 and that at that price the total market quantity demanded is 75,
    11·2 answers
  • Which of the following statements are true regarding​ externalities? ​(Check all that apply​.) A. Deadweight loss can be either
    6·1 answer
  • Marta is CEO of a large financial company. She is always open to the opinions of her employees and tries to make a decision base
    14·1 answer
  • Your market value is determined by what you bring to the job.<br><br> True<br> False
    14·2 answers
  • Good morning everyone how yall doing today
    9·2 answers
  • Which of the following know as general overhead?
    6·1 answer
  • Suppose a store offer a loyalty card. the stores punches the card at every visit and on the seventh visit the customer gets a 20
    14·1 answer
  • the common stock of salazar insurance pays a constant annual dividend of $4.80 per share. what is one share of this stock worth
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!