All categories

3 years ago

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.

You might be interested in

A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three pr

Vika [28.1K]

Answer:

A. 0.684

Explanation:

A seasonal index refers to an index that is used to compare the value for a particular period with the average value of all periods.

The purpose of using a seasonal index is to show the relationship between the two values, and the degree to which the two values are different.

The seasonal index can be calculated as the latest value for a period divided by the average of all periods. Therefore, we have:

Seasonal index for July = Latest value for July / Average demand over all months = 130 / 190 = 0.684.

Therefore, he approximate seasonal index for July is 0.684.

5 0

3 years ago

On February 1, a customer's account balance of $2,700 was deemed to be uncollectible. What entry should be recorded on February

Anvisha [2.4K]

Answer:

On February 1, a customer's account balance of $2,700 was deemed to be uncollectible.

The entry to be recorded on February 1 to record the write-off assuming the company uses the allowance method is:

Debit Allowance for Doubtful Accounts $2,700; credit Accounts Receivable $2,700.

Explanation:

Using the allowance method, every bad debt entry is first reflected in the Allowance for Doubtful Accounts before it is taken to the bad debt expense account.

The entries above reduce the Accounts Receivable account by the amount of the write-off and reduces the Allowance for Doubtful Accounts by the same amount. Any recovery of written off debt is also treated in the Allowance for Doubtful Accounts and the Accounts Receivable account in revised order. This method is unlike the direct write-off method. With the direct write-off method, the Accounts Receivable is credited with the amount of the write-off and the write-off is expensed in the Bad Debts Expense account directly.

5 0

3 years ago

Service Revenue for the year = $80,000. Of this amount, $70,000 is collected during the year and $10,000 is expected to be colle

galina1969 [7]

Answer:

Net Cash Inflow from Operating Activities = $16,000

Explanation:

In the given information, it is not provided that cash is paid or not for Supplies, thus, assumed it was paid at the time of acquisition, and not in the current period when it is only charge to expense.

In that case, Cash generated from operating activities using direct method, shall be:

Cash flow from Operating Activities

Cash revenue collected = $70,000

Cash collected in advance = $2,000

Total cash inflow = $72,000

Cash paid for salaries = - $35,000

Cash paid for advertising expense = - $10,000

Cash paid for utilities = - $11,000

Total Cash outflow = - $56,000

Net Cash Inflow from Operating Activities = $16,000

6 0

3 years ago

According to the law of increasing opportunity cost,

Alenkinab [10]

Answer:

The correct answer is a. production points outside the production possibility frontier are unattainable

Explanation:

Production possibility frontier graph is attached.

The production possibility frontier shows the possibilities of trade off between two products. The trade off in this frontier use all the resources available. So it is impossible to reach a point outside the frontier, there are not enough resources.

Download xlsx

7 0

3 years ago

How important is structure/culture compared to the other primary internal considerations for a strategic plan?

ZanzabumX [31]

Explanation:

The organizational structure and culture are essential for the design of a strategic plan aligned with the organization's purpose.

What happens is that the structure and culture of an organization constitute its identity, its way of organizing itself and creating an environment designed to obtain the objectives and goals stipulated by strategic planning. So it can be said that there is no way to develop a strategic plan without considering the structure or culture, because it is through these two variables that action plans are developed and modeled according to what the company is, and what it plans to be in the future. All organizational systems must be foreseen in the planning and be developed with the same degree of importance, because together they form the organizational whole that will lead a company to be well positioned in the market, achieve continuous improvement in its processes, achieve competitive advantage in the market, etc.

7 0

2 years ago