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3 years ago

Using the midpoint formula, calculate elasticity for the following change in demand.

Business

1 answer:

emmainna [20.7K]3 years ago

3 0

Answer:

-2.33

Explanation:

The computation of the price elasticity of demand using mid point formula is shown below:

= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in price ÷ average of quantity demanded)

where,

Change in quantity demanded would be

= Q2 - Q1

= 5,000 - 2,500

= 2,500

And, average of quantity demanded would be

= (5,000 + 2,500) ÷ 2

= 3,750

Change in price would be

= P2 - P1

= $0.45 - $0.60

= -$0.15

And, average of price would be

= ($0.45 + $0.60) ÷ 2

= 0.525

So, after solving this, the price is -2.33

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2 years ago

On November 30, Year 1, Parlor, Inc. purchased for cash at $15 per share all 250,000 shares of the outstanding common stock of S

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Answer:

$275,000

Explanation:

Goodwill in business combination arises when the price paid in acquiring a business exceeds the fair value of the acquired business net assets . The fair value is used rather than the carrying amount to ensure fairness and an unbiased result

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3 years ago

Nile Corp. has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:

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Answer:

Overheads cost allocated to Mossman Job = $449

Explanation:

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3 years ago

The variance analysis cycle ______. Multiple choice question. begins with the preparation of the budget includes the investigati

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The variance analysis cycle C. begins with the preparation of performance reports.

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A performance report is at the heart of the variance analysis cycle.

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Thus, the variance analysis cycle C. begins with the preparation of performance reports.

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2 years ago

Suppose Congress is considering raising the top federal marginal tax rate from 35% to 40%. Senator Jones believes the elasticity

KIM [24]

Answer:

Explanation:

Solution-

According to Senator Jones, the elasticity of taxable income is larger, which means that due to a certain percentage rise in taxes, the taxable income rises by a greater percentage. Also, according to Senator Smith, the elasticity of taxable income is small, which means that due to a certain percentage rise in taxes, the taxable income rises by a smaller percentage.

(I) Under Senator Jones assumptions, due to rise in taxes, the taxable income has risen considerably as compared to Senator Smith assumptions. Thus the estimates of additional revenue from the tax increase will be larger under Senator Jones assumptions, compared to Smith's assumptions.

(ii) Since under Senator Jones assumptions, elasticity of taxable income is large. So due to rise in taxes, there is a significant proportional rise in taxable income under Jone's assumptions compared to Senator Smith assumptions. Thus the costs of the tax increase is borne more under Senator Jones assumptions , compared to Smith's assumptions.

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3 years ago