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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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Based on the information given, Martha is incorrect. Sam's quantity demand has decreased.

<h3>What is demand?</h3>

Demand means the quantity of a good and services that consumers are willing and able to buy at various prices during a given period of time

In this case, Martha is incorrect. This is because Sam's quantity demanded has decreased, and his demand has not changed.

Learn more about demand on:

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2 years ago

In the current year, Borden Corporation had sales of $2,190,000 and cost of goods sold of $1,295,000. Borden expects returns in

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Answer:

The entries are as follows

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Credit: Inventory on Sales on Returns $77,700

Explanation:

To derive the figure for Sales Refund payable for the year

6% of $2,190,000

= $\frac{6}{100} * 2,190,000$ = $131,400

To derive the figure for Inventory cost on Sales Refund payable for the year

6% of $1,295,000

= $\frac{6}{100} * 1,295,000$ = $77,700

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3 years ago

QUESTION 8 of 10: Your average weekly take home wage is $615. You take a one-week paid vacation and a second week unpaid vacatio

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Answer:

$45

Explanation:

A surplus is when income exceeds expenses.

One year has 52 weeks. If one week was unpaid leave, then payments were received for 51 weeks.

Average payments per week = $615

Total earning per week =$615 x 51

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The total expenses for the year were $31,320. The surplus amount will be income minus expenses

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3 years ago

It is one of Garrett’s job responsibilities to report the amount of foreign direct investment undertaken by the government over

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Answer: flow

Explanation:

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This flow consists of reinvestment earnings, equity transactions, and company debt transaction.

Inward and outward flows are also been taken into consideration, how foreign investments/transaction are noted in and out of the organization.

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3 years ago

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A companys management team should give serious consideration to bidding for a private label footwear contract in a particular ge

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