Answer:price elasticity of demand for Dunkin Donuts’ regular coffee is 1.8
Explanation: Using the midpoint formnulae
Price elasticity of Demand =percentage change in quantity demanded/ Percentage change in price.
Percentage change in quantity = new quantity - old quantity / (new quantity + old quantity)/2 x 100
= 40-10/(40+10)/ 2 = 30 /25 = 1.2 x 100 =120%
Percentage change in price = new price - old price / new price + old price)/2 x 100
= 1- 2 / (1+2)/2= -1/1.5x 100 = -66.67 %
Price elasticity of Demand =percentage change in quantity demanded/ Percentage change in price.
= 120%/-66.67%= -1.79 = -1.8
For Price elasticity of demand, the sign is not included and the basis for elasticity is on the value itself . here we can conclude that the Price elasticity of demand for Dunkin donut is 1.8 and elastic because a fall in price led to an increase in amount being sold.
Answer:
$42,000
Explanation:
Deferred tax liability can be defined as the tax liability which has been due for the current period but has not yet been paid such as installment sales receivable.
Insurance expense of $210,000
Tax rate of 20%
( $210,000 × .20 )
=$42,000
Therefore the amount of the deferred tax liability at the end of 2021 will be $42,000
Answer: b. Set higher prices to the students as their demand is relatively more inelastic.
Explanation:
Price elasticity of demand measures the change in quantity demanded to changes in price levels.
If demand is inelastic, a small change in price has a small effect on quantity demanded. An inelastic demand usually has a coefficient of less than 1.
The elasticity of demand for students and senior citizens are both inelastic but that of the students is greater than that of senior citizens. They are less responsive to price changes when compared with senior citizens.
Answer:
AD2 and then to AD3
Explanation:
If the investment is continued to increase by federal reserve it would only be feasible when money creation decreases the interest rate.
The aggregate demand would then be expanded and the aggregate demand curve shifted to the right. The necessary increase in aggregate demand must be such that aggregate shifts in demand curve from AD1 to AD2 to AD3.
Answer:
option a 13.5%
Explanation:
Expected
Return Volatility
Value Stocks 0.12 14%
Growth Stocks 0.15 24%
<u>Solution</u>
Expected return on market portfolio = Weight of value stock * return of value stock + weight of growth stock * value of growth stock
Expected return on market portfolio = 0.5 * 0.12 + 0.5 * 0.15
Expected return on market portfolio = 0.06 + 0.075
Expected return on market portfolio = 0.135 or 13.5%
