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Darina [25.2K]
3 years ago
5

G.R. Dry Foods Distributors specializes in the wholesale distribution of dry goods, such as rice and dry beans. The firm’s manag

er is concerned about an article he read in this morning’s Wall Street Journal indicating that the incomes of individuals in the lowest income bracket are expected to increase by 10 percent over the next year. While the manager is pleased to see this group of individuals doing well, he is concerned about the impact this will have on G.R. Dry Foods. Please explain what will happen to the price of the products G.R. Dry Foods sells? Why?
Business
1 answer:
slamgirl [31]3 years ago
7 0

Answer:

d. The price will decrease, because dry beans and rice are inferior goods.

Explanation:

the options are missing, so I looked them up:

a. The price will decrease, because dry beans and rice are normal goods.

b. The price will increase, because dry beans and rice are normal goods.

c. The price will increase, because dry beans and rice are inferior goods.

d. The price will decrease, because dry beans and rice are inferior goods.

Inferior goods are those goods whose quantity demanded decreases as consumer income increases. This happens because inferior goods have several substitute products that cost more, but as consumer income increases, consumers will tend to purchase the more expensive substitute goods instead of the cheaper inferior ones. I.e. as consumer income increases, they will seek to purchase higher quality goods, and inferior goods are generally low quality goods that are mostly purchased by people located at the lower socio-economic classes. Other examples of inferior goods are canned meat, instant noodles and cheap frozen foods.

Since the quantity demanded of inferior goods decreases as the economy improves, the demand curve shifts to the left, which will result in a lower equilibrium price.

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DENIUS [597]

Answer:

16.80% and 39.43%

Explanation:

The formula to compute the net profit margin is shown below:

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For Travel lite, the net profit margin is

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And, for fare line, the net profit margin is

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3 years ago
Current operating income for Bay Area Cycles Co. is $34,000. Selling price per unit is $100, the contribution margin ratio is 25
leonid [27]

Answer:

break even point in unit =5440 units

break even point in sales = $544000

total sale = $680000

Explanation:

given data

Current operating income = $34,000

Selling price = $100

margin ratio = 25%

to find out

Bay Area Cycle’s break even point in units and total sales dollars

solution

we get here first break even point that is express as

break even point in unit =  \frac{fixed\ cost}{contribution\ per\ unit}   ..................1

break even point in unit =  \frac{136000}{100*0.25}

break even point in unit =5440 units

so

break even point in sales =  \frac{fixed\ cost}{margin\ ratio}   ..................2

break even point in sales = \frac{136000}{0.25}

break even point in sales = $544000

and

total sales will be

total sale =  \frac{operating\ income+ fixed\ expense}{margin\ ratio}   ..................3

total sale =  \frac{34000+136000}{0.25}

total sale = $680000

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