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emmainna [20.7K]
3 years ago
7

An increase in input costs in the production of electric automobiles caused the price of electric automobiles to rise. Holding e

verything else constant, how would this affect the market for gasoline-powered automobiles (a substitute for electric automobiles)?
1. The demand for gasoline-powered automobiles would decrease because consumers could afford to buy fewer gasoline-powered automobiles.
2. The supply of gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would decrease.
3. The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would decrease.
4. The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would increase.

Business
1 answer:
Tanzania [10]3 years ago
8 0

Answer:

4. The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would increase.

Explanation:

Substitute goods are goods that can be used in place of each other.

If the price of electric automobiles rises, the automobile becomes more expensive for consumers. Consumers would reduce the quantity demanded of the electric automobile and shift its demand to gas powered automobiles.

As a result, the demand for gas automobiles increases and the equilibrium price would increase too.

I hope my answer helps you

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Cane company manufactures two products called alpha and beta that sell for $225 and $175, respectively. each product uses only o
tester [92]

Answer:

The special order should be rejected since it decreases net profit.  

Explanation:

Alpha = $225

Beta = $175

total production capacity = 130,000 pounds

raw materials = $6 per pound

Production costs per unit                        Alpha                Beta

direct materials                                          $42                   $24

direct labor                                                 $42                   $32

variable manufacturing overhead            $26                   $24  

fixed manufacturing overhead                 $34                   $37

variable selling expenses                         $31                    $27

<u>common fixed expenses                          $34                   $29  </u>

total cost per unit                                    $209                 $173

Cane expects to sell 114,000 Alphas.

Net profit = (114,000 x $225) - (114,000 x $209) = $25,650,000 - $23,826,000 = $1,824,000

If the new sales order is accepted, Cane's revenue will increase to:

  • 101,000 x $225 = $22,725,000
  • 29,000 x $156 = $4,524,000
  • total = $27,249,000

Their total cost will by:

  • 114,000* x $209 = $23,826,000
  • 16,000 x ($209 - $34 avoidable fixed costs) = $2,800,000
  • total = $26,626,000

*This sale increases the output, but previous costs cannot be avoided.

Net profit with special order = $27,249,000 - $26,626,000 = $623,000

The special order should be rejected since it decreases net profit.  

6 0
3 years ago
Dave Seminsky’s ability to open Sumarian Coffee in Shanghai can be attributed to which of the following?A. ethnocentrismB. avail
Advocard [28]

Answer:

E. globalization

Explanation:

-Ethnocentrism refers to judging another culture based on your own culture and considering yours as superior.

-Availability of supplies refers to having access to the products needed for the business.

-Avoidance of tariffs and import quotas refers to not having limitations like  paying taxes on imports or exports or having a maximum quantity of a product that can be imported or exported.

-Lower labor costs refers to low salaries.

-Globalization refers to a process of integration that involves people, governments and companies around the world. When talking about business is about developing an international presence and beginning to operate in other countries.

According to this, Dave Seminsky’s ability to open Sumarian Coffee in Shanghai can be attributed to globalization.

4 0
3 years ago
Which of the following is an example of a sunk cost?
coldgirl [10]

Answer:

The correct answer is option D.

Explanation:

Sunk costs can be defined as those costs which already been incurred and cannot be recovered anymore. These costs are excluded from business decision making.

It is can be referred to as a cost that is no longer relevant.  

The $8 paid for a ticket, after the person starts watching the movie is a sunk cost as it cannot be recovered anymore.  

Sunk costs are contrasted to relevant cost which is yet to be incurred in the future. Cost pf machinery, equipment, etc are examples of sunk cost.

3 0
3 years ago
Stock in CDB Industries has a beta of 1.10. The market risk premium is 7 percent, and T-bills are currently yielding 4 percent.
12345 [234]

Answer:

Cost of equity = 11.7%

Explanation:

<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.</em>

Under CAPM, Ke= Rf + β(Rm-Rf)  

Rf-risk-free rate,-4%,  β= Beta-1.10, (Rm-Rf) = 7% ,Ke = cost of equity

Using this model,  

Ke=4% + 1.10×7%

= 11.7 %

Cost of equity = 11.7%

3 0
3 years ago
Serial Problem Business Solutions LO P4 Business Solutions sells upscale modular desk units and office chairs in the ratio of 3:
stich3 [128]

Answer:

Instructions are below.

Explanation:

Giving the following information:

The selling prices are $1,310 per desk unit and $560 per chair. The variable costs are $810 per desk unit and $310 per chair. Fixed costs are $180,000.

The company sells 3 deks per 2 chairs.

Sales proportion:

Desks= 3/5= 0.6

Chairs= 2/5= 0.4

1) Selling price per composite unit= sales proportion*selling price

Selling price per composite unit= 0.6*1,310 + 0.4*560

Selling price per composite unit=  $1,010

2) Variable cost per composite unit= sales proportion*unitary variable cost

Variable cost per composite unit= 0.6*810 + 0.4*310

Variable cost per composite unit= 610

3) Break-even point (units)= Total fixed costs / Weighted average contribution margin

Break-even point (units)= 180,000/ (1,010 - 610)

Break-even point (units)= 450 units

4) Number of units for each product:

Desks= 0.6*450= 270

Chairs= 0.4*450= 180

5 0
3 years ago
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