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ratelena [41]
3 years ago
12

At a total cost of $20, the number of trips is 190,000. if you use an estimate of the elasticity equal to 2, how many trips will

people take when the fee is $16? (hint: take the percent change in price and multiply it by the elasticity of 2. this is the percent change in quantity. apply this to the 190,000 quantity at a $20 total cost. finally, subtract off this change from the 190,000 quantity.)
Business
1 answer:
LekaFEV [45]3 years ago
3 0
<span>An elasticity of 2 means that a 1% increase in price will cause a 2% decrease in demand.
 Change in price in % = (20 - 16) / 20 * 100 = 4/20 * 100 = 20%. So there's a 20% decrease in price (from $20 to $16)
 A 20% decrease in price will result in a 40% increase in demand since elasticity equals 2.
 So 40/ 100 * 190, 000 = 76, 000
 Hence since there's an increase in demand the people will make 190, 000 + 76, 000 = 266, 000</span>
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false

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A new technological breakthrough increases production for an industry and shifts the supply curve to the right. If the firm ____
Katyanochek1 [597]

Answer:

The correct answer is letter "C": produces products that are considered elastic.

Explanation:

Elasticity refers to the sensitivity of a good or service to reflect change in its supply or demand after a change in price. A product's supply is said to be elastic if the changes in the quantity supplied increases and it immediately determines a price in the price.

Thus, if for technological reasons the output of a company increases, considering that the product is elastic, the prices will increases which will provide the organization more revenue. That firm will be more than glad about the technological advance.

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3 years ago
Which of the following is the correct formula for profit?
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(Sales volume * Price) – (Variable costs + Fixed costs)

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3 0
3 years ago
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Vladimir79 [104]

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