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egoroff_w [7]
3 years ago
6

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium pri

ce to:

Business
1 answer:
never [62]3 years ago
8 0

Answer:

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.

Explanation:

Perfectly inelastic demand curve indicates the quantity demanded for the life-saving medicine remains the same or does not change in response to a change in price.

Since a part of the law of supply states that the lower the quantity supplied, the higher the price; a reduction in the supply of the life-saving medicine will increase its price.

The combining effect of the two above will lead to an increase in the equilibrium price while the equilibrium quantity will remain the same as it will not respond to the change in price.

The attached graph explains this more clearly. In the graph, the demand curve DD is used to represent the perfectly inelastic demand curve for the life-saving medicine. Therefore, the quantity remains at q no matter the changes, either increase or decrease, in price. Movement from the supply curve S1 to S2 indicates a reduction in supply of the life-saving medicine which causes an increase in the equilibrium price from Po to P1 while the equilibrium quantity stays at q.

This therefore shows that if the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.

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How do pharmacies implement lean operations to ensure that customers will always receive their medications upon​ demand?
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The answer is letter A.

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If a good's production process results in pollution and the government taxes producers to pay for cleanup costs, then :______
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Answer:

c. supply will decrease.

Explanation:

If a good's production process results in pollution and the government taxes producers to pay for cleanup costs, then supply will decrease.

Generally, when consumers of a particular product notices that the product has an adverse effect on the environment (pollution) or it is a product that causes environmental degradation, they are most likely to stop demanding or buying such products. Consequently, as the demand for such goods falls or decreases; there would be a fall in the supply of such goods. This is so because the demand for goods and services is directly proportional to the amount of quantity supplied.

8 0
3 years ago
The projected benefit obligation was $460 million at the beginning of the year. Service cost for the year was $25 million. At th
juin [17]

Answer:

The question is not complete:

Here is the complete question:

The projected benefit obligation was $460 million at the beginning of the year. Service cost for the year was $25 million. At the end of the year, pension benefits paid by the trustee were $21 million and there were no pension-related other comprehensive income accounts requiring amortization. The actuaries discount rate was 5%. The actual return on plan assets was $24 million although it was expected to be only $23 million.

What was the pension expense for the year?

Here is the answer: The pension expense is $25 million.

Explanation:

Pension is the form of defined benefit contribution plan which require employers to make certain periodic contribution on behalf of employees. This contribution is reported as an expense in the income statement if even though the benefit has not been enjoyed by the employees. To determine the value of this expenses to be included in the income statement, the components of the pension expenses are relevant.

Components of pension expense are service cost, interest cost, return on plan asset, amortization of prior service costs and gain or loss from change in asset value.

Here is the determination of the pension expense as required by the question.

                                                                            $`M

Service cost                                                          25

Interest ($460,000,000*5%)                               23

Expected return on plan asset                           (23)

Amortization of prior service costs                       -

Gain or loss in change in value                           <u> -</u>

Pension expense                                                <u> 25</u>

4 0
3 years ago
If you borrow​ $100,000 at an annual rate of​ 8.00% for a 10minusyearperiod and repay with 10 equal annual endminusofminusthemin
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Answer:

Amortized loan

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An amortized loan is a loan with scheduled periodic payments that are applied to both principal and interest. An amortized loan payment first pays off the relevant interest expense for the period, after which the remainder of the payment reduces the principal.

Interest is calculated based on the most recent ending balance of the loan and the interest amount owed decreases as payments are made. This is because any payment in excess of the interest amount reduces the principal, which in turn, reduces the balance on which the interest is calculated.

3 0
3 years ago
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