Answer:
Option (C) is correct.
Explanation:
Elasticity of demand refers to the responsiveness of change in quantity demanded with any change in the price level.
Elasticity of demand:
= (change in quantity ÷ old quantity) ÷ (change in price ÷ old price)
=[(12 - 8) ÷ 8] ÷ [($3 - $2.25) ÷ $3]
= 0.5 ÷ 0.25
= 2
Therefore, the price elasticity of demand is 2.
Answer:
Accrual Principle
Explanation:
The accrual principle is when a transaction is recorded in the time period that it occurs. In this case, recording a Friday transaction on Friday.
Answer:
The journal entry to record accrued salaries would include a credit to salaries payable of $364500.
Explanation:
Salaries payable = 500000 - (500000*6%) - (500000*1.5%) - 98000
= $364500
Therefore, The journal entry to record accrued salaries would include a credit to salaries payable of $364500.
Answer:
1.87/22 = 0.085 = 8.5%
Explanation:
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Answer:
Add to its capital stock.
Explanation:
Rental firms earn profit by buying goods and renting them out at a price higher.The advantage of owning capital is the real rental price of capital for the units of capital owned and rented.
In this case, the real rental price of capital is $10,000 per unit where as the real cost of capital is $9,000 per unit. This means the firm is getting a profit from the business of $1000 per units assuming interest on their loans, cost of loss/ gain on the price of capital and depreciation costs are taken care.To maximize profit at this level, the firm can increase capital stock by buying more goods and renting them out at the current real rental price of capital.