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Yakvenalex [24]
2 years ago
7

John Doe estimates that the price elasticity of demand for new SUVs to be 0.75. If the price of SUVs rose by 15%; would the quan

tity demanded of new SUVs rise or fall? By what percentage?
Business
1 answer:
Sphinxa [80]2 years ago
3 0
If the coefficient of demand for the SUV is 0.75 this means that it has a relatively inelastic demand (<1). This means that there is only a little change in demand when prices change. Elastic demand (>1) on the other hand has greater changes in demand when prices change; they have lots of substitutes.

So when the price of SUV rise by 15%, and it has a coefficient of 0.75, we can expect only 11.25% decrease in its demand. Still very small. This is because SUVs do not have many substitutes for it.

Formula: (x/15%)=0.75
Then simply solve for x -> x = (0.75)(0.15) = 11.25%
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podryga [215]

Answer:

<em>Brooks is the leader of an association created to defend the free enterprise system in the United States.</em>

As a consequence, he is probably biased towards free enterprise and will be more likely to argue for it without recognizing its drawbacks.

Another useful source would be an article that explains free enterprise's negative economic and social characteristics.

6 0
3 years ago
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Last year, Rec Room Sports reported earnings per share of $9.10 when its stock price was $282.10. This year, its earnings increa
svetlana [45]

Answer:

The correct answer is "$338.52".

Explanation:

The given values are:

Market price,

= $282.10

Earning per share,

= $9.10

Earning increased,

= 20%

As we know,

⇒  PE \ ratio=\frac{Market \ price}{Earning \ per \ share}

On substituting the given values, we get

⇒                  =\frac{282.10}{9.10}

⇒                  =31

Current year earnings,

=  9.10\times 120 \ percent

=  10.92 \ per \ share

Thus,

⇒ 31=\frac{Market \ price}{10.92}

⇒ Market \ price = 31\times 10.92

⇒                        =338.52 ($)

6 0
3 years ago
Synergy will ______ the sales of existing products.
patriot [66]

Synergy will <u>increase</u> the sales of existing products.

Synergy refers to the concept where two companies will combine their  value and performance and they will be greater than the sum of the separate individual parts. Thus, these two companies can merge to create greater efficiency or scale.

Through synergy individuals or entities combine their efforts and resources to accomplish more collectively than they could individually. This practice eventually results in increased productivity, efficacy, and performance. Synergy is seen to be reflected on a company's balance sheet through the company's goodwill account.

Hence, in addition to merging with another company, a company also creates synergy by combining products or markets.

To learn more about Synergy here:

brainly.com/question/26886908

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3 0
2 years ago
Assume you are the new Product Manager in our Amazon Prime business and are in charge of Pricing. The VP would like to lower the
vaieri [72.5K]

Answer:

Provided in Explanation

Explanation:

This is a very general question however I’ll try to answer it to the best of my knowledge.

If I use my own assumptions then these will be the Projections:

Selling Price         $79.99  Selling Price         $69.99

Cost of Sales/unit $40.00  Cost of Sales/unit $40.00

Expenses/unit $15.00  Expenses/unit $15.00

   

Demand @ $79.99 1000 Demand @ $69.99 1200

   

Sales         $79,990.00  Sales         $83,988.00

Cost of Sales $40,000.00  Cost of Sales $48,000.00

Expenses $15,000.00  Expenses $18,000.00

Profit        $24,990.00        Profit         $17,988.00

The final decision however relies on the Price Elasticity of the Product. If the Product is Price elastic then lowering the Price will lead to a significant rise in Demand. However if the Product is Price inelastic then lowering the Price will not lead to a significant rise in Demand and thus profit margins will be lowered. If the Product is Price inelastic then it is better to increase prices in order to gain more profits. In the case of Unit Elasticity the change in Demand will be at the same proportion as price change so it won’t be of any use to change the Price.

3 0
3 years ago
Suppose that you are the vice president of operations of a manufacturing firm that sells an industrial lubricant in a competitiv
gladu [14]

Answer:

400

Explanation:

Qd = 45 - 2P

Qd    = -15 + P

45 - 2P = P - 15

60 = 3P

60/3 = P = 20

Q = 45 - 2*20 = 5

Q = -15+20 = 5

The quantity will be 5 and price 20

<u>Now we will caclulate the consumer surplus:</u>

Which the area of the demand curve above the equilibrium.

We calculate he area of a triangle:

base x high / 2

\frac{(45-5)\times20}{2}

consumer surplus = 400

7 0
3 years ago
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