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Tatiana [17]
2 years ago
5

You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products

: splishy splashies, flopsicles, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of splishy splashies decreases by 1%, the quantity of flopsicles sold decreases by 18% and the quantity of cannies sold increases by 3%. Your job is to use the cross-price elasticity between splishy splashies and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity between splishy splashies and flopsicles, and then between splishy splashies and cannies. In the second column, determine if splishy splashies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with splishy splashies.
Business
1 answer:
levacccp [35]2 years ago
5 0

Answer:Please refer to Explanation

Explanation:

Cross Price Elasticity of Demand is a very useful tool in Economics to ascertain if goods are compliments or Substitutes.

Cross Price Elasticity of Demand (CPSD) measures the change in demand in one good due to a change in price is the other good.

If the CPSD is negative then the goods are Compliments meaning that they are used together which is why when the price of one good goes down, the demand of the compliment goes up because more of the original good will be bought due to the lower price.

If the CPSD is Positive, it means that they are Substitutes and a Decrease in price in one good leads to a decrease in demand for the other good because people will demand less of it and switch to the former (now cheaper) good.

The formula is,

=  % change in Quantity Demanded of Product A /% change in Price of Product B

a. Splishy splashies and Flopsicles

CPSD = -18%/-1%

= 18%

The CPSD for both these products is 18% which is a positive figure. This means that they are Substitutes and <u>should not be marketed together. </u>

b. Splishy Splashies and Flopsicles

CPSD = 3%/-1%

= -3%

With the CPSD being a negative figure here, these goods are Compliments.

Splishy Splashies and Flopsicles <u>should be Marketed together</u> as they compliment each other.

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John Inc. is a manufacturing business. For a given accounting period, the business’s total revenue amounted to $75,000, while it
maksim [4K]

Answer:

John Inc.'s return on equity for this accounting period is:

B.

26.66 percent

Explanation:

Return or equity is a ratio used to calculate the efficiency of a certain business. It is calculated by dividing the net income on the stockholders' equity. Therefore, in our case, we translate this into 40 000 dollars divided into 150 000. Giving us a  result of .26 %. Thus, the correct option is the B. option.

8 0
3 years ago
In uncertain economic times, what serves as a way of preserving economic value that can be spent or consumed in the future?
Debora [2.8K]

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6 0
3 years ago
Foyert Corp. requires a minimum $30,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid mont
igor_vitrenko [27]

Answer:

From the attached excel file, we have:

a. Ending Cash Balance:

October = $30,000

November = $30,000

December = $34,546

b. Loan Balance End of Month:

October = $20,100

November = $15,301

December = $0

Explanation:

Note: See the attached excel file for the cash budget for October, November, and December.

In the attached excel file, the following calculations are made:

October additional loan = Minimum required cash balance - October Preliminary cash balance = $30,000 - $19,900 = $10,100

November Loan Repayment = November Preliminary cash balance - Minimum required cash balance = $34,799 = $30,000 = $4,799

Download xlsx
8 0
2 years ago
A recent income statement of McClennon Corporation reported the following data:
arsen [322]

Answer:

The correct answer is option b.

Explanation:

The number of units of output sold is 8,000 .

The sales revenue is $9,600,000 .

The variable costs are $6,000,000 .

The fixed costs are $2,600,000.

The price of the product

= \frac{Sales\ Revenue}{Q}

= \frac{9,600,000}{8,000}

= $1,200

The average variable cost is

= \frac{TVC}{Q}

= \frac{6,000,000}{8,000}

= $750

Profit =  TR - TC

Profit = Price\ \times\ Q - (AVC\ \times\ Q )\ +\ TFC)

$1,270,000 = $1,200Q - $750Q - $2,600,000

$3,870,000 = $450Q

Q = \frac{3,870,000}{450}

Q = 8,600 units

7 0
3 years ago
Victryl Company applies overhead based on direct labor hours. At the beginning of the year, Victryl estimates overhead to be $70
fenix001 [56]

Answer:

The answer is: The overhead variance was $1,700 and it was overapplied

Explanation:

Victryl's estimated overhead cost per labor hour was:

$700,000 / 35,000 = $20 per labor hour

If during February, Victryl had 5,000 direct labor hours, then its estimated cost should have been: $20 x 5,000 = $100,000 estimated overhead cost

The actual overhead cost was $98,300, which is $1,700 less than the estimated cost.

8 0
3 years ago
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