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3 years ago

For each of the following pairs, predict whether the cross-price elasticity of demand will be positive or negative:

Business

1 answer:

Dmitry_Shevchenko [17]3 years ago

3 0

Answer:

a) Positive.

b) Positive.

c) Negative.

Explanation:

a. Soap and hand sanitizer.- Positive cross elasticity of demand.

b. CDs and MP3s.- Positive cross elasticity of demand.

c. Sheets and pillowcases.- Negative cross elasticity of demand.

Cross price elasticity of demand are used as tool to measure the demand of one product by the change in price of related product like subtitute or complimentry goods and service. It is calculated by using ratio or percentage change in quantity demanded by percentage change in price of a related goods.

Read more about classified stock:

<em>brainly.com/question/23881482</em>

6 0

3 years ago

A deadweight loss is a consequence of a tax on a good because the tax a. induces the government to increase its expenditures. b.

zalisa [80]

Answer:

B) induces buyers to consume less, and sellers to produce less.

Explanation:

Taxes are a necessary evil since they always increase the price of the goods and services that consumers buy and decrease the amount of money that producers receive from selling their goods and services. But taxes are necessary and unavoidable.

But once a market assumes all the effects of existing taxes it reaches an equilibrium price that both consumers and producers are satisfied with. If a new tax is levied than the deadweight losses are greater since consumer surplus and producer surplus are both reduced. This will lead to a reduction in the incentive that both consumers and producers have to engage in transactions. Many times consumers will substitute heavily taxed goods for other goods since they feel they are getting more from consuming those goods (consumer surplus). The same happens to producers, many producers will change their heavily taxed goods for other goods.

If the price elasticity of demand or supply of a certain good is large (elastic demand and supply), the deadweight loss will be greater.

7 0

3 years ago

Susan's salary is $44,000 and she received dividends of $600. She received a statement from SJ partnership indicating that her

EastWind [94]

Answer:

Income Tax is referred to as the amount of money an individual is required to report and remit to the tax agencies for earning revenues. Also, it is the federal government's share from the individual's earnings which would be used for their public works projects such as building railways and sewage treatment.

The following amounts are taxable and not.

a. Salary, $44,000 (Yes )

b. Dividends received, $600 (Yes )

c. Share of partnership income, $4,000 (Yes)

d. Partnership distribution in the current year, $1,000 (No)

e. Partnership distribution in the following year, $600 (No)

f. State lottery winnings of $2,000 (Yes)

3 0

3 years ago

Read 2 more answers

Cushman Company had $846,000 in sales, sales discounts of $12,690, sales returns and allowances of $19,035, cost of goods sold o

Inessa [10]

Answer:

Explanation:

I'm pretty sure that gross profit is simply just sales-Cost of goods sold

846,000-401,850= 444,150

5 0

3 years ago

You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equ

taurus [48]

Answer:

8.15 %

Explanation:

Weighted Average Cost of Capital (WACC) is the business Cost of permanent sources of finance pooled together. It shows the risk of the business and is used to evaluate projects.

WACC = Cost of Equity x Weight of Equity + Cost of Preferred Stock x Weight of Preferred Stock + Cost of Debt x Weight of Debt

<u>Remember to use the After tax cost of debt :</u>

After tax cost of debt = Interest x ( 1 - tax rate)

= 6.50% x (1 - 0.40)

= 3.90 %

therefore,

WACC = 11.25% x 55% + 6.00% x 10% + 3.90 % x 35%

= 8.15 %

Thus,

Quigley's WACC is closest to 8.15 %.

3 0

3 years ago