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4 years ago

What is consumer surplus? Using real-world data, what information would you need to measure consumer surplus for a product?

Business

1 answer:

Marina86 [1]4 years ago

7 0

Answer:

Consumer surplus is a degree of welfare that people gain from consuming goods and services in a free market.

The informatio needed is the market price of the good or service, and the amount of good consumed. Is necessary too information about the demand curve.

Explanation:

In a free market are millions of consumers that has different preferences for good and services. Some of them are willing to pay more or less than the market price. The consumer surplus is the welfare produced by the lower price that consumers that are willing to pay more, actually pay.

For this analysis is required the demand function, the market price and the equilibrium quantities.

Example: if I love apples, and I'm willing to pay 5 dollars for a kilo, but in the fruit market the price of a kilo is 1 dollar, the market conditions offer a welfare situation where I pay less for something I actually value more.

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Craig's Car Wash Inc. is considering a project that has the following cash flow and cost of capital (r) data. What is the projec

otez555 [7]

Answer: B - 2.09 years

Explanation:

Discounted payback period calculates how long it takes for the amount invested in a project to be recovered from the cash flows generated from the project.

The calculation used in getting the answer is found in the attachment.

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4 years ago

Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The requir

borishaifa [10]

Answer:

11.11%

Explanation:

The full question with table is attached.

We need the rate of return formula using Capital Asset Pricing Model (CAPM). The formula is:

$R=R_f+\beta(R_m-R_f)$

Where

R is rate of return (what we need)

$R_f$ is risk-free return rate (5% = 0.05)

$R_m$ is the market rate of return (11% = 0.11)

To get $\beta$ , we take the weighted average of the portfolio.

Weight of Stock A = 1,075,000/3,000,000 = 0.3583

Weight of Stock B = 675,000/3,000,000 = 0.225

Weight of Stock C = 750,000/3,000,000 = 0.25

Weight of Stock D = 500,000/3,000,000 = 0.1667

Portfolio Beta = (0.3583*1.2) + (0.225*0.50) + (0.25*1.40) + (0.1667*0.75) = 1.02

Now, we calculate rate of return using CAPM formula:

$R=R_f+\beta(R_m-R_f)\\R=0.05+1.02(0.11-0.05)\\R=0.1112$

That is 11.12%, or from answer choice, it is 11.11%

7 0

3 years ago

Suppose that Italy and Germany both produce beer and stained glass. Italy's opportunity cost of producing a pane of stained glas

Dimas [21]

Answer:

Explanation: See attachment below

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3 years ago

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A leveraged buyout refers to a(n): a. action where the management of the firm and/or an external party buys all of the assets of

grigory [225]

Answer:

a restructuring action whereby a party buys all of the assets of a business, financed largely with debt, and takes the firm private.

Explanation:

A leverage means taking a loan to consummate a deal. So a leveraged buyout is when an entity takes a loan in order to buy all the assets of a firm and take it private.

Leveraged buyout is practices by parties that do not have enough funds to purchase a company, but they see a high return of Investments over time.

So they take a loan to buyout the company in the hope that returns will eventually cover the loan taken

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3 years ago

Time management and world view college success

Stolb23 [73]

Explanation:

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In the following Alleyoop Advice video, Alleyoop (Angel Aquino) discusses what many students discover about college: there is a lot of free time—and just as many challenges to balance free time with study time

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4 years ago

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