A 4 percent increase in the price of beer will cause a 1 percent decline in the quantity of beer demanded. The demand for beer i
1 answer:
Answer:
The demand for beer is inelastic
Explanation:
Price Elasticity of Demand (PED) is the measure of responsiveness of the demand of a consumer to a product to a change in the price of the product. The formula is percentage change in quantity demanded divided by percentage change in price.
A PED of greater than 1 is elastic, meaning that the demand for a product is sensitive to the very small change in price.
A PED of less than 1 is said to be inelastic, which implies that there is no significant change in the quantity demanded when the price changes. In our example, the PED is inelastic because:
since 0.25 is less than 1, PED is inelastic
Finally, if the ratio of the percentage changes in both quantities demanded and price equals 1, it is said to be unit elastic. This means that there is a proportionate change in quantity demanded with a change in price.
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Answer:
the equivalent uniform annual worth of owning and operting the machien at 5% diiscount rate:
$17,610.88
Explanation:
we will bring each exceptional value to present date and then calcualte the PTM of that
First step:
present value of eahc lump sum:
overhaul:
Maturity 45,000
time 5
PV 35,258
Services:
20,000 year 4 = 16,454.05
10,000 year 8 = 6,768.39
salvage value
30,000 10 years = 18,417.40
<u>total present worth:</u>
150,000 + 6,768.39 + 16454.05 + 35258 - 18,417.40 = 190,063.04
now we calcualtethe PTM of this present value
PV $190,063.04
time 10
rate 0.05
C $ 15,110.881
we add the 2,500 maintenance cost
$17,610.88
This will be the equivalent uniform annual worth of owning and operting the machien at 5% diiscount rate