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LenKa [72]
3 years ago
7

Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.8.

Business
1 answer:
alexira [117]3 years ago
6 0

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

1). Price elasticity demand for cigarettes = 0.80

Government want to decrease smoking = 20% = 0.20

Require increase price rate = 0.20 ÷ 0.80 = 0.25 = 25%

Government Should Increase the Price by

= Current Cost of Cigarettes Pack × Require Increase Price Rate + Current Cost of Cigarettes Pack

= $5 × 25% + $5

= $1.25 + $5

= $6.25 a pack

2). If the government constantly increases the price of cigarettes, the impact on smoking will be higher in 1 year from now than in 3 months from now. It takes time to break a Smoking habit. And it takes people a long time to get out or reduce their smoking addiction.

3). According to the study, adolescents have a higher demand price elasticity than adults because adolescents have less income than adults, and they are more sensitive to price. If the price of cigarettes rises teenagers don't have enough funds to invest in their smoking habits because of their low savings and wages. Cigarette addiction in adults is more than youth addictions. And the demand for cigarettes among adults is difficult to reduce.

         

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Answer:

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Explanation:

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Using this formula

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Let plug in the formula

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The correct answer is option (e).

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8 0
3 years ago
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Assume that a family spends 35% of its income on housing, 20% on travel-related expenses, 10% on utilities, 25% on health care,
iogann1982 [59]

Answer:

We need the slope of each category.

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3 years ago
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Answer:

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See report below

Explanation:

The sales budget for the month of June would like as follows:

Budgeted Sales

Product                 units        Price     Total($)

A                        40,000       $7          280,000

B                         39,000    $9            351,000

Actual sales

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A                        39,000       $7.10         276,900

B                        49,600       $8.90         441440

Sales Budget Report for the month of June 2019

                                Budget           Actual           Variance ($)

A                        280,000                  276,900         3,100      Unfavorable

B                        351,000                   441,440            <u>90,440  </u>favorable

   Total sales variance                                          <u>  87,340   Favorable</u>

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