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REY [17]
3 years ago
5

10.3. Gadgets are produced and sold in a competitive market. When there is no tax, the equilibrium price is $20 per gadget. The

own-price elasticity of demand for gadgets is 0.5.If an excise tax of $4 leads to an increase in the price of gadgets to $24, what must be true about the own-price elasticity of supply for gadgets
Business
1 answer:
ANEK [815]3 years ago
6 0

Answer:

isΔ PdΔ Ps=EQs, PEQd,PAs given in the question, 40=EQs, P−0.5This perfectly elastic supply shows the burden of tax is imposed completely on the consumer, indicating the elasticity of supply is infinite.

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The Three Amigos Restaurant just paid an annual dividend of $4.20 per share and is expected to pay annual dividends of $4.40 and
shusha [124]

Answer:

$33.93

Explanation:

First, find the present value of each year's dividend at 15% required rate of return;

(PV of D1 ) = 4.40 / (1.15) = 3.8261

(PV of D2 ) = 4.50 / (1.15²) = 3.4026

Next, find terminal Cashflow;

D3 = D2 (1+g)

D3 = 4.50 (1.02) = 4.59

(PV of D4 onwards ) = \frac{\frac{4.59}{0.15-0.02} }{(1.15)^{2} } \\ \\ = \frac{35.3077}{1.3225} \\ \\ = 26.6977

Next sum up the PVs to find price;

=3.8261 + 3.4026 + 26.6977

= 33.926

Therefore, this stock is worth $33.93 today

7 0
3 years ago
Firms are organizations that A) take advantage of the public. B) transform resources into products. C) transform outputs into in
loris [4]

Answer:

B

Explanation:

A firm is an organisation that is created to make profit. They transform resources into products

They include :

  • corporations
  • limited liabilities
  • partnerships
7 0
2 years ago
The competitive firm's supply curve is equal to A. the portion of its marginal cost curve that lies on and above AFC. B. its mar
grandymaker [24]

Answer:

a. the portion of its marginal cost curve that lies above the AVC

Explanation:

In short run, a perfectly competitive produces as long as its price is above its AVC, so revenues can cover total variable cost. If price is below AVC, the firm has to shut down. Since such a firm maximizes profit by equating Price with MC, this condition means that firm's supply curve is its MC curve lying above the (minimum point of) AVC curve.

6 0
2 years ago
Darlene is getting an FHA-insured loan to purchase a house. The purchase price is $278,000, and she’s paying 3.5% down. She will
omeli [17]

Answer:

96.5%

Explanation:

Data provided in the question:

Purchase price i.e the value = $278,000

Down payment paid = 3.5%

Upfront mortgage insurance premium = $4,865

Now,

Amount of down payment = 3.5% of loan value

= 0.035 × $278,000

= $9,730

Therefore,

The loan value = value - Amount of down payment

= $278,000 -  $9,730

= $268,270

Thus,

loan-to-value on the loan = [ loan value ÷ value ] × 100%

= [ $268,270 ÷ $278,000 ] × 100%

= 96.5%

4 0
3 years ago
Good and bad studyhabbits and an example of each?
kolbaska11 [484]
Good habits:
Be organized- Have all materials needed in study area
Bad Habits:
Do not leave harder or more challenging question for the last- knock out easier assignments early when you are fresh
3 0
3 years ago
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