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3 years ago

If price increases by 12 percent and quantity demanded decreases by 10 percent, demand is _________

Business

1 answer:

Vinil7 [7]3 years ago

6 0

Answer:

Demand is Inelastic

Jack : Substitution Effect dominates

Becky : Buy fewer hiking boots

Explanation:

Elasticity of Demand is responsive change in demand due to change in price. Demand is : Elastic - When proportionate change (% change) in demand > proportionate (% change) in price and Inelastic - When proportionate change (% change) in demand < proportionate change (% change) in price .

So, If price rise by 12% & demand decreases by 10% , Demand is Inelastic.

a. Substitution Effect is consumer's shift from dearer to cheaper goods & so, rise in demand of falling prices good , fall in demand of rising prices good . Jake buying lesser T shirts (relatively expensive) when price of Donuts fall (relatively cheaper) means Substitution Effect dominates for him.

b. Income Effect is price - demand inverse relationship, by change in real purchasing power due to price change. Price rise reduces real purchasing power, decreases demand & price fall increases real purchasing power, increases demand. Becky's paint brush price rise reduces her real purchasing power & she consumes less of both paintbrushes & hiking boots.

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Your sister turned 35 today, and she is planning to save $20,000 per year for retirement, with the first deposit to be made one

Elenna [48]

Answer:

She can spend $162,114.58 at the end of each period before she can exhaust the amount.

Explanation:

She will save up to $1,889,215.73 by saving $20,000 per year for 30 years, making the first deposit at the end of a year from today.

FV (Future Value) $1,889,215.73

PV (Present Value) $248,180.82

N (Number of Periods) 30.000

I/Y (Interest Rate) 7.000%

PMT (Periodic Payment) $20,000.00

Starting Investment $0.00

Total Principal $600,000.00

Total Interest $1,289,215.73

She can can retrieve $162,114.58 at the end of each period to reach the future value of $0.00.

FV (Future Value) $-0.00

PV (Present Value) $-0.00

N (Number of Periods) 25.000

I/Y (Interest Rate) 7.000%

PMT (Periodic Payment) $-162,114.58

Starting Investment $1,889,215.73

Total Principal $-2,163,648.74

Total Interest $2,163,648.74

8 0

3 years ago

Samples Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $21

Anvisha [2.4K]

Answer:

$18.60

Explanation:

Target cost:

= Sales revenue - Profit

= (No. of units sold × Selling price per unit) - (Investment require × desired return on investment)

= (20,000 × $21) - ($400,000 × 0.12)

= $420,000 - $48,000

= $372,000

Target cost per unit:

= Target cost ÷ Number of units

= $372,000 ÷ 20,000

= $18.60

Therefore, the target cost per unit is closest to $18.60.

5 0

3 years ago

Which component of consumption has a negative or indirect relationship with consumption?

Sveta_85 [38]

Answer:

Interest rates

Explanation:

Here are the options to the question : o Interest rates o Real income Real income o Expected future income o Wealth

Disposable income is either saved or consumed. When interest rates fall, savings would fall as returns on investment would be lower and consumption would increase.When interest rates rise, savings would increase and consumption would fall

5 0

3 years ago

Question 19 A company just starting in business purchased three merchandise inventory items at the following prices. First purch

Lunna [17]

Answer:

Answer is A. USD 80/-

Explanation:

Using FIFO costing, we get:

<u>Gross Profit = Sales - Cost of Goods Sold </u>

COGS (Cost of Goods Sold) for two units,

COGS = First purchase + Second purchase

COGS = $70 + $80

COGS = $150

Sales = $230

<u>Calculating the Gross Profit: </u>

GP (Gross Profit) = Sales - Cost of Goods Sold

GP = $230 - $150

GP = $80

7 0

4 years ago

Read 2 more answers

Which of the following is a condition that triggers the penalty for negligence or intentional disregard? 1) the taxpayer underst

Vsevolod [243]

Answer:

2) the taxpayer shows negligence or disregard of the rules or regulations, causing an underpayment.

Explanation:

When any taxpayer shows some negligence or if they disregard the rules and the regulations, causing an underpayment, then it leads to a penalty for the disregard or the negligence.

Also, when a taxpayer intentionally understates his or her tax by a larger of $5000 or a 10% of his / her correct tax, then it is an accuracy related penalty.

And, also the information related penalties which are levied for failure of taxpayer to pay the amount of tax owed by due date and also failure to filing the return by the due date.

Thus option (2) is correct.

5 0

4 years ago