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3 years ago

In the short run, the price elasticity of the demand and supply of electricity can be very low.

Business

1 answer:

tatiyna3 years ago

5 0

Answer:

A. Revenue for the industry would increase

B. Short term incentive to shut down a power plant

Explanation:

The price elasticity of demand is a concept that determines the variability of the demand of a product or service relative to changes in its price. We know that the demand curve is a downward sloping curve so any changes in price will result in a lower level of demand. Exactly how much the demand will reduce in percentage terms relative to a percentage increase in price is calculated using the price elasticity of demand. If a demand is inelastic (i.e the price elasticity is low) for any percentage increase in price will lead a less than proportionate increase in demand. So for example, a 10% increase in price will lead to a less than 10% decrease in demand.

In our question, the first part indicates that a power plant has been shut down which decreases the supply. This is indicated by an inward shift of the supply curve to the left. This inward shift would cause the price to increase. However, since the price elasticity of demand is very low in the short run, the demand will increase by a LOWER percentage. Therefore overall revenues of the industry would increase. To show this as an example, lets assume that the price was $1 for which demand was 100 units. Existing revenue is therefore $100. Due to the shift in supply, prices increase upward by 10%. The new price would be $1.1. However since the demand is inelastic, the demand would reduce by less than 10% (lets assume by 5%). The new demand would then be 95 units. The new revenue would be $104.5. Therefore, we can see that industry revenue would increase.

The answer to option B is similar to above. The caveat is that since one company has many power plants, it controls a significant portion of total industry supply, making it a monopoly. In this scenario, its fair to assume that if the company reduces its supply, there is a negligible risk of a competitor firm increasing its supply to capture the market. So the company would have a short term incentive to shut down a plant every now and then to capitalize on the the higher revenue generated from the associated increase in price. Furthermore, shutting down a plant would save up on costs which would allow profits to increase even more in the short run

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It's time to think like a manager. Corporate social responsibility is wonderful, though often criticized as purely rhetorical an

melamori03 [73]

The correct answer to this open question is the following.

It's time to think like a manager. And more importantly, it is time to act like a manager and became a true leader.

Corporate social responsibility is wonderful, though often criticized as purely rhetorical and laden with subtle profit goals. That is why is so important that a manager could emphasize genuinely that corporate social responsibilities are a priority for the organization.

One good way to prove that and stop critics is to establish a series of programs and actions that benefit the environment and the community and that could be evaluated by the members of the society.

This includes mass media. Yes, the company has to open its doors and be willing and able to show the results of these programs. If the company has nothing to hide, it will have no problem to show its work and be proud of the monetary results as well as the social responsibility results that benefit the community.

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3 years ago

The Card Shoppe needs to maintain 21 percent of its sales in net working capital. Currently, the store is considering a four-yea

Annette [7]

Answer:

$13,650

Explanation:

The computation of net working capital recovery is shown below:-

Net working capital recovery = (Sales in the 4th year of the project - Sales before the project) × Sales percentage

= ($414,000 - $349,000) × 21%

= ($414,000 - $349,000) × 0.21

= $65,000 × 0.21

= $13,650

Therefore for computing the net working capital recovery we simply applied the above formula.

3 0

3 years ago

Lynda Jones College Plan On her 10th birthday Linda Jone's parents decide to deposit $4,000 in a 529 account for their daughter

dimulka [17.4K]

Answer:

Is the $4,000 savings per year sufficient to cover the anticipated college expenses?

No, since the maximum withdrawal per year (for 4 years) earning an 8% interest rate is $12,846.23. Her parents will be $7,153.77 short every year.

Is Linda's 529 account underfunded?

Yes, her account will have $42,548 when she turns 18 and that isn't enough to cover her college expenses.

What should be the annual deposit in Lynda's 529 account to cover entirely her tuition and fees?

$6,227.51

What will be the PV of Lynda's college tuition on her 18th birthday?

If Lynda's parents want to cover her college expenses, they need to have $66,242 on her 529 account.

Explanation:

Lynda's 529 account will have the following balance when she is 18:

future value = annual payment x annuity factor (FV annuity factor, 8%, 8 periods) = $4,000 x 10.637 = $42,548

her parents will make 4 withdrawals:

present value = annual withdrawal x annuity factor (PV annuity factor, 8%, 4 periods)

maximum annual withdrawal = $42,548 / 3.3121 = $12,846.23

required balance = $20,000 x 3.3121 = $66,242

annual payment = $66,242 / 10.637 = $6,227.51

6 0

3 years ago

A firm has net working capital of $1,770. long-term debt is $4,180, total assets are $11,830, and fixed assets are $3,910. what

Elanso [62]

Net-working capital = $1,770

Long term debt = $4,180

Total Assets = $11,830

Fixed Assets = $3,910

Total liabilities Amount = ?

Total current Assets = Total Assets – Fixed Assets

$11,830 - $3,910 = $7,920

Current Assets - current liabilities = Net-working capital

Current liabilities = Current Assets - Net-working capital

=$7,920 - $1,770 = $6,150

Total liabilities = current liabilities + long term debt

=$6,150 + $4,180

=$10,330

Amount of the total liabilities is $10,330

4 0

3 years ago

Growth of specialization in the kinds of jobs people hold __________. has slowed dramatically since the 1970s, along with the de

artcher [175]

Answer:

has continued right up to the present

Explanation:

Specialization refers to workers focusing on a single task and perfecting that task alone instead of doing various tasks at the same time. Growth of specialization in the kinds of jobs people hold has continued right up to the present. One of the reasons for this is that companies prefer individuals that are highly skilled on the specific task that they need done and that will be able to do it in the most efficient way possible.

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3 years ago