Answer:
The consumers' sensitivity to a price change.
Explanation:
The price elasticity of demand is a measure of the change in the quantity demanded by customers for a product, relative to change in price. It is computed using the following formula:
Price Elasticity of Demand = %change in quantity demanded/%change in price
If the quantity demanded for a good rises or falls proportionally more than the change in price, the good is classified as elastic. For example, if the price of salt rises by 15%, and the quantity demanded falls by 20%, then salt is an elastic good.
If the quantity demanded for a good rises or falls proportionally less than the change in price, the good is classified as inelastic. For example, if the price of gasoline rises by 30%, but the quantity demanded only falls by 10% (as it's often the case in reality), then gasoline is an inelastic good.
Solution :
In the context, it is given Alex and J.J. both are applying for a job openings in a law firm at Chicago. Both of them got the job offer but J.J. got lower salary than Alex. The salaries are different for both J.J and Alex. Some of the possible explanations for the difference in salaries that may be related to some scenarios are :
- Alex went to higher tier law school ---- difference in education
- J.J. is reentering the workforce after two years away --- difference in experiences.
- Alex will be working with a notoriously difficult boss --- compensating differentials.
- Alex is a man and J.J. Is a woman --- economic discrimination.
Answer:
It will take 3 years and 66 days to pay for the initial investment.
Explanation:
Giving the following information:
Cash flows= $615 for 8 years
Initial investment= $1,750
<u>The payback period is the time required to cover for the initial investment.</u>
<u></u>
Year 1= 615 - 1,750= -1,135
Year 2= 615 - 1,135= -520
Year 3= 615 - 520= 95
Exactly:
(95/520)= 0.18*365= 66
It will take 3 years and 66 days to pay for the initial investment.
