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3 years ago

Which of the following would most likely make the demand for an item more elastic?

Business

2 answers:

rodikova [14]3 years ago

6 0

Answer:

C. There are no costs of switching to competitor's products.

Explanation:

Demand is buyers ability & willingness to buy at a price, time. Elasticity of Demand is buyers' demand responsiveness to price change.

Elastic demand means demand changes more with regards to price change. Inelastic demand means demand changes less with regards to price change.

In case of : buyers perceiving less substitute competing goods, item representing a small fraction of consumer's budget, buyers having less time to adjust to price change - Demand responds less to price change i.e is Inelastic.

If there are no costs to switching to substitute competitors' goods, shifting to other substitute goods is more convenient. This easier goods substitution makes good's demand more responsive to price change i.e Demand is Elastic.

dexar [7]3 years ago

6 0

Answer:

The correct answer is letter "C": There are no costs of switching to competitor's products.

Explanation:

Demand Elasticity is the measure of how demand changes as other factors change and is often referred to as price elasticity of demand because the price is most often the factor used to measure elasticity. Demand elasticity helps a company predict changes in demand based on changes in price, market entry of competitive goods, and other factors.

Thus, if there are no costs for consumers to switch from one product to another due to competition, the demand elasticity for that product is high.

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The following information is available for a company's utility cost for operating its machines over the last four months. Month

andreev551 [17]

Answer:

Variable cost per unit= $2.28

Explanation:

Giving the following information:

January 940 $ 5,490

February 1,840 $ 6,980

March 2,480 $ 8,100

April 640 $ 3,900

To calculate the variable cost per machine hour under the high-low method, we need to use the following formula:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (8,100 - 3,900) / (2,480 - 640)

Variable cost per unit= $2.28

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3 years ago

what is the amount of the overall tax (corporate level + shareholder level) on the $590.000 of pre-interest expense earnings if

andre [41]

$54,000 is a reasonalble amount

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3 years ago

Read 2 more answers

A manufacturing department completed and transferred to finished goods a total of 50,000 units. They also had 2,500 units in end

Alinara [238K]

Answer:

The cost of units completed this period is $ 350,000

Explanation:

Units Out of the Process Were:

Finished Goods = 50,000

Ending Work In Progress = 2500

1.) Finished Goods Equivalent Units

Materials : Finished Goods are 100% complete in terms of materials hence 50000 equivalent units

Conversion : Finished Goods are 100% complete in terms of conversion costs hence 50000 equivalent units

2.) Cost of units completed Units

Materials : 50000 × 5.75 =287500

Conversion : 50000×1.25 =62500

Total = 287500 + 62500 = $ 350,000

*Note Ending Inventory is not relevant for this question

3 0

3 years ago

g Select one: a. Capital budgeting analysis for expansion and replacement projects is essentially the same because the types of

timofeeve [1]

Answer:

The correct statement option is b.

Explanation:

The replacement decision involves an analysis of two independent projects where cash flows include the initial investment, additional depreciation and the terminal value.

The replacement decision is the process of identifying, evaluating and taking decisions on two or more independent alternatives. During this process company evaluate various alternatives of investment in different projects and select one of the best alternative based on its cost, rate of return, time required and risk associated with it etc.

6 0

3 years ago

Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6-5, LO6-6, LO6-7]Menlo Company

bonufazy [111]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Sales= $640,000 ($40)

Variable expenses= 448,000 (28)

Contribution margin= 192,000 ($12)

Fixed expenses= (145,200)

Net operating income=$46,800

1) To calculate the break-even point in units and dollars, we need to use the following formulas:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 145,200/(40-28)

Break-even point in units= 12,100 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 145,200/ (12/40)

Break-even point (dollars)= $484,000

2) The break-even point is the number of units to sell to reach a net profit of cero. Therefore, the contribution margin must be equal to the fixed costs.

Contribution margin= 145,200

3) profit= $75,600

Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit

Break-even point in units= 220,800/12

Break-even point in units= 18,400 units

Sales= 18,400*40= 736,000

Total variable costs= 18,400*28= (515,200)

Contribution margin= 220,800

Fixed costs= 145,200

Net profit= 75,600

4) The margin of safety:

Margin of safety= (current sales level - break-even point)

Margin of safety= 640,000 - 484,000= $156,000

Margin of safety ratio= (current sales level - break-even point)/current sales level

Margin of safety ratio= 156,000/640,000

Margin of safety ratio= 0.244= 24.4%

5) Contribution margin ratio= 12/40= 0.3

Net increase= 96,000*0.3= $28,800

5 0

3 years ago