In 2010, bad freezes destroyed a large portion of Florida's grapefruit crop. Explain what happened in the grapefruit market usin
g the concepts of supply and demand in your analysis. How did this affect the equilibrium price and quantity of grapefruit
1 answer:
Answer: Please refer to Explanation
Explanation:
The Grapefruit market will experience an acute shortage of grapefruits because the bad freeze destroyed most of the crop that was going to be supplied.
This shortage in supply will force the price up and therefore lead to a drop in Demand as a lot of people will decide that they can't spend the new amount.
This scenario would lead to an increase in the Equilibrium price because the supply curve will be forced to the left and the new intersect with the Supply curve will be higher. The Equilibrium Quantity will also reduce because of the shortage that is being experienced as a result of a large portion of the grapefruits being destroyed.
In the graph I attached, S2 refers to the supply curve AFTER the bad freezes. Notice how the price went up to P2 and the Quantity dropped to Q2.
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The numerator of the return on common stockholders' equity is net income minus preferred dividends.
Option d
<u>Explanation:</u>
Return on common stockholders' equity which is also named as return on equity (ROE) ratio evaluates the accomplishment of a company in resulting income for the benefit of common stakeholders.
<em>Use of return on equity:</em>
- Isolates common equity returns
- Can be used to evaluate dividends
- Evaluates the use of capital by the management
It is calculated by income available for stockholders divided by the total number of common stock and is expressed or represented in percentage. Income available for common stockholders can be arrived by reducing preference dividends from Net income.
That is,
Hence, net income minus preferred dividends is the right answer.