This occurs when a government spends more money than it takes in.

A bakery works out a demand function for its chocolate chip cookies and finds it to be q = D(x)= 760-13x, where q is the quanti

Reika [66]

Answer:

Please refer to the below for explanation.

Explanation:

From the above, the demand function is given as ;

D(x)=760-13x

a) Find the elasticity

It means finding the derivative of the function

D'(X)=-13, hence elasticity is expressed as

xD'(x) / D'(x)

= x(-13) / 760 - 13x

= 13x / 760 - 13x

The elasticity expression is thus ; E(x)= 13x / 760 - 13x

b) At what price is the elasticity demand equal to 1.

The above means that E(X) = 1

Putting 1 for E(X) in the elasticity equation,

E(x) = 13x / 760 - 13x

1 = 13x / 760 - 13x

When you cross multiply, you'll have

760 - 13x = 13x

Collecting like terms, you'll have

760 = 13x + 13x

760 = 26x

Dividing both sides by 26, you'll have

x = 760 /26

x = 29.23

It means that the elasticity at the price of demand = 1 is 29.23

c) At what price is the elasticity of demand elastic.

The above means that E(X) > 1

Thus;

13x / 760 - 13x > 1

When you cross multiply, you'll have

13x > 760 - 13x

Collecting like terms, you'll have

13x + 13x > 760

26x > 760

Dividing both sides by 26, you'll have

x > 760/26

x > 29.23

It means that the elasticity of demand is elastic at x > 29.23

d) At what price is the elasticity of demand inelastic

The above means that E(X) < 1

Hence;

13x / 760 - 13x < 1

When you cross multiply, you'll have

13x < 760 - 13x

Collecting like terms, you'll have

13x + 13x < 76

26x < 760

Dividing both sides by 26, you'll have

x < 760/26

x < 29.23

It means that the elasticity of demand is inelastic at x < 29.23

7 0

3 years ago

The market risk premium is defined as __________. A. the difference between the return on an index fund and the return on Treasu

jonny [76]

Answer:

A. the difference between the return on an index fund and the return on Treasury bills.

Explanation:

This term can be primarily used in denoting of opportunity cost in an investment, and also for risk assessment.

It is primarily defined to be the difference between an expected return on a market investment against the risk free rate. When a graph is been put to consideration, the market risk premium equals the security market line.

It is also primarily known also for its provision of quantitative measure found in the extra return demanded by market participants for the increased risk. At this summation, it is denoted that it is the difference between the return on an index fund and the return on Treasury bills.

7 0

3 years ago

Ryan Co. sells major household appliance service contracts for cash. The service contracts are for a 1-year, 2-year, or 3-year p

ollegr [7]

Answer:

$475,000

Explanation:

The amount should be reported as unearned service contract revenues in Ryan's December 31, Year 1, and balance sheet will be the amount that has not expired in year 1 or outstanding service contracts that will expire in year 2 to year 4. Therefore,

Year 2 + Year 3 + Year 4 = $150,000 + 225,000 + 100,000 = $475,000 should be reported as unearned service contract revenues.

5 0

3 years ago

LLAP Company manufactures a special-ized hoverboard. LLAP began 2017 with an inventory of 240 hoverboards. During the year, it p

TEA [102]

Answer:

Please see solution below

Explanation:

1. Prepare an income statement assuming LLAP uses variable costing

$

Sales

$800 × 1,300 = $1,040,000

Less cost of goods sold

Opening stock

($375 × 240)

$90,000

Add cost of goods manufactured

$450,000

Less closing stock

($374 × 140)

($52,500). ($487,500)

Gross profit. $562,500

Less periodic costs

Fixed production costs

($319,000)

Fixed advertising, marketing, admin

($150,000)

Shipping cost

($20 × 1,300)

($26,000)

Net income

$57,500

2. Prepare an income statement assuming LLAP uses absorption costing

$

Sales ($800 × 1,300)

$1,040,000

Less costs of goods sold

Opening stock ($665 × 240)

$159,600

Add costs of goods manufactured

769,000

Less closing stock ($665 × 140)

($93,100)

Add under - applied overhead

$29,000. $864,500

Gross profit. $175,500

Less periodic costs

Fixed advertising, marketing, admin

($150,000)

Shipping cost ($20 × 1,300)

($26,000)

Net loss. ($500)

3. Compute the Break even point in units sold assuming LLAP uses variable and absorption costing

a. Variable costing

BEP(units) = Fixed costs / Contribution per unit

= $319,000 + $150,000 / ($800 - $375 - $20)

= $469,000 / $405

= 1,159

b. Absorption costing(production = 1,200 boards)

BEP(units) = Fixed costs / Contribution per unit

= $319,000 + $150,000 / ($800 - $375 - $20)

= $469,000 / $385

= 1,159

3 0

3 years ago

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth

Grace [21]

Answer:

current share price is $71.05

Explanation:

given data

grow at a rate = 20 percent

time = 3 year

growth rate falling off = 8 percent

dividend = $1.45

solution

we get here price of the stock in Year 3 that is 1 year before the constant dividend growth that is

P(3) = D(3) × (1 + g) ÷ (R - g) .............1

P(3) = D0 (1 + g1)³ × (1 + g2) ÷ (R - g)

P(3) = $\frac{1.45\times 1.20^3 \times 1.08}{0.11-0.08}$

P(3) = $90.206

and

then price of the stock today is present value of first three dividends + present value of the Year 3 stock price

so price of the stock today is

P(0) = $\frac{1.45(1.20) }{1.11} + \frac{1.45(1.20)^2}{1.11^2} +\frac{1.45(1.20)63}{1.11^3} +\frac{90.2016}{1.11^3}$

P(0) = $71.05

4 0

3 years ago