If the price elasticity of demand for a product is -2.5, then a price cut from $2.00 to $1.80 will <u>increase </u>the quantity demanded by about <u>2.5%</u>.
Price elasticity of call for is a measurement of the trade in the intake of a product on the subject of exchange in its price. Expressed mathematically, it's miles: charge Elasticity of demand = percent trade-in quantity Demanded / percentage trade-in rate.
we are saying a great is price elastic whilst growth in prices causes a bigger % fall in demand. e.g. if fee rises 20% and demand falls 50%, the PED = -2.five. Examples consist of Heinz soup.
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C = 50 + 0.8Y is the consumption function that is consistent with the provided data. The MPC is determined by subtracting the change in consumption from the change in disposable income, which equals 160/200, or 0.8.
Marginal propensity calculation.
$200 billion less $0 billion equals $200 billion in changes to disposable income.
Consumption change equals $210 minus $50, or $160 billion.
MPC = Change in Consumption/Change in Disposable Income, which equals $160 billion/$200 billion and is equal to 0.8.
There is a 0.8 marginal tendency to consume.
Step 2
This is how consumption function is defined.
C = a + bY
Where,
a = Consumption at zero income level
b = MPC
In given case,
$50 billion would be consumed at a level of income zero.
MPC is 0.8
So,
C = 50 + 0.8Y is the consumption function that matches the provided data.
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Answer:
A business may be constrained by a variety of licensure and other regulatory requirements, based on the industry and activities the business wants to pursue. For example, a lawyer must obtain a legal license in a particular state before he can open a practice in that state.
Answer:
Option (A) is correct.
Explanation:
Contribution Margin:
= Total sales of the product - variable expenses
= $400,000 - $270,000
= $130,000
Avoidable fixed cost = Total fixed cost - Unavoidable fixed cost
= $160,000 - $ 70,000
= $90,000
Net Margin :
= Contribution Margin - Avoidable fixed expense
= $130,000 - $90,000
= $40,000
Hence, if product A is dropped, the company's overall net operating income would decrease by $40,000 per year.
Answer:
15.83%
Explanation:
Calculation to determine is the standard deviation of the returns on Kurt’s Adventures, Inc. stock
First step is to determine l E(r)
E(r) = (.30 *.30) + (.55 *.12) + (.15 *-.20)
E(r)= .09 + .066 -.03
E(r)= .126
Second step is to determine Var
Var = .30 *(.30 -.126)^2 + .55 *(.12 -.126)^2 + .15 *(-.20 -.126)
Var=0090828 +.0000198 + .0159414
Var= .025044
Now let determine the Std dev
Std dev = √.025044 = .15825
Std dev= 15.83 percent
Therefore the standard deviation of the returns on Kurt’s Adventures, Inc. stock.is 15.83 percent
