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Ronch [10]
3 years ago
15

Honda Motor Company is considering offering a $ 1 comma 800 rebate on its​ minivan, lowering the​ vehicle's price from $ 30 comm

a 200 to $ 28 comma 400. The marketing group estimates that this rebate will increase sales over the next year from 42 comma 000 to 53 comma 900 vehicles. Suppose​ Honda's profit margin with the rebate is $ 5 comma 650 per vehicle. If the change in sales is the only consequence of this​ decision, what are its costs and​ benefits? Is it a good​ idea?​
Business
1 answer:
finlep [7]3 years ago
6 0

Answer:

Taking into consideration only the income, the increase in unit sales will not increase the income of Honda. It can impact in other ways, like a decrease in inventory.

Explanation:

Giving the following information:

Honda Motor Company is considering offering an $1800 rebate on its​ minivan

New price $30200

Old price $28400.

The marketing group estimates that this rebate will increase sales over the next year from 42000 to 53900 vehicles.

Honda's profit margin with the rebate is $5650 per vehicle.

Normal price:

Income= (5650+1800)*42000= $312,900,000

New price:

Income= 5650* 53900= $304,535,000

Taking into consideration only the income, the increase in unit sales will not increase the income of Honda. It can impact in other ways, like a decrease in inventory.

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White raven [17]

Answer:

The sacrifice ratio could be as small as 0

Explanation:

The Sacrifice Rate is the loss of output due to the fight against inflation, and can be expressed as how much product is lost to reduce inflation by 1 percentage point. The Sacrifice Rate is a proposition by economist Robert Lucas Jr, who noted that the slowdown in long-term inflation is associated with a reduction in the production of goods and services over a period of time until economic agents adapt to the new reality. pricing and restructuring their expectations of the economy. Therefore, the social cost of fighting inflation is a reduction in GDP and an increase in the unemployment rate.

Because of this, we can conclude that if policymakers are committed to reducing inflation and rational people understand this commitment and quickly reduce their inflation expectations, the sacrifice rate can be as low as 0.

7 0
2 years ago
The following is cost information for the Creamy Crisp Donut Company.Entrepreneur's potential earnings as a salaried worker = $5
jarptica [38.1K]

Answer:

Creamy Crisp's total revenues exceed its total costs, including a normal profit, by $366,000

Explanation:

Creamy Crisp's total revenue exceeds its total cost, including a normal profit by =

When answering this we use all the actual costs and revenue and all the hypothetical figures, or the opportunity costs and revenue as we need to calculate total revenue exceeding costs and normal profits.

Total revenue actual + potential = Entrepreneur's potential earnings as a salaried worker $50,000 + Annual revenue from operations $380,000 + Value of entrepreneur's talent in the next best entrepreneurial activity $80,000 + Entrepreneur's forgone interest on personal funds used to finance the business $6,000

= $516,000

Total costs = Payments to workers $120,000 + Utilities (electricity, water, disposal) costs $8,000 + Annual lease on building = $22,000

= $150,000

Creamy Crisp's total revenues exceed its total costs including a normal profit by $516,000 - $150,000 = $366,000

Since normal profit is included and not excluded normal profit shall not be computed separately and the final answer is $366,000

4 0
2 years ago
(Scenario: Assets and Liabilities of the Banking System) According to the Scenario: Assets and Liabilities of the Banking System
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If the banking system does NOT want to hold any excess reserves,  $250,000 will be <u>added </u>to the money supply.

<h3>What is an excess reserves?</h3>

Excess reserves is known to be the capital reserves that is said to be held by a bank or financial institution and it is one that is too much or is in excess of what is needed by regulators, creditors, or others.

Since there is  $25,000 worth of U.S. Treasury bills, one will multiply it times 10 = $250,000

Therefore,  If the banking system does NOT want to hold any excess reserves,  $250,000 will be <u>added </u>to the money supply.

Learn more about excess reserves from

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7 0
2 years ago
*BLANK* bias indicates the tendency of an individual to attribute his or her own successes to internal factors while putting the
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Answer:

B- Self-serving

Explanation:

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6 0
3 years ago
At the profit-maximizing level of output
tensa zangetsu [6.8K]

Answer:

The correct answer is letter "C": marginal revenue equals marginal cost.

Explanation:

The profit-maximizing level of output for every type of firm is reached when the marginal revenue of production equals the marginal cost meaning that the additional cost of selling one more unit equals the cost of producing one more unit.

Marginal costs vary according to changes in production. Because of that, managers must identify when those events happen to calculate the profit margin (percentage sales that are converted into profits) of the firm to avoid losses.

5 0
3 years ago
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