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Y_Kistochka [10]
3 years ago
14

A manufacturer produces 400 units when the market price is $10 per unit and produces 600 units when the market price is $12 per

unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about:
A. 0.45.
B. 2.0.
C. 2.2.
D. 200.
Business
2 answers:
vodka [1.7K]3 years ago
5 0

Answer:

C. 2.2.

Explanation:

Mid point elasticity is calculated as follows:

<em>% change in qty supplied/ % change in price</em>

<em />

<em>% change in qty supplied</em>

= (600-400)/(600+400)/2

= 0.4

<em> % change in price </em>

= (12 -10)/(12+10)/2

= 0.181

Mid point elasticity

= 0.4/0.18

=2.2

             

Olegator [25]3 years ago
3 0

Answer: C. 2.20

Explanation:

Given the folliwing

At price(P1) = $10 per unit,

Quantity produced(Q1) = 400 units

When price(P2) = $12,

Quantity produced(Q2) = 600 units

The price elasticity of supply is used to determine how quantity supplied is affected by changes in the price of a commodity.

The midpoint method of determining price elasticity of supply :

(Percentage change in quantity supplied ÷ percentage change in price)

[(Q2-Q1) ÷((Q2+Q1)/2) ÷ (P2-P1)÷((P2+P1)/2)]

Percentage Change in quantity supplied = [(600-400)/(600+400)/2)] =200/500 = 0.4

Percentage change in price = [(12-10)/(12+10)/2]

= 2/11 = 0.1818

Therefore, price elasticity of supply = (0.4 ÷ 0.1818) = 2.20

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If you intend to purchase Tata Nano, describe the stages in the purchase decision process.
fiasKO [112]

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6 0
2 years ago
A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $100 per day. Assume
ollegr [7]

Answer:

a. What is the MRP? What is the MRC? Should the firm add this delivery vehicle?

marginal revenue product = marginal product of labor x marginal revenue per output unit

MRP = 1,500 packages x $0.10 per package = $150

marginal resource cost (MRC) = $100 (the cost of renting the delivery truck)

The company should add the delivery truck because MRP is higher than MRC.

b. Now suppose that the cost of renting a vehicle doubles to $200 per day. What are the MRP and MRC in this situation?

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MRC = $200 (the cost of renting the delivery truck)

The company should not add the delivery truck because MRP is less than MRC.

c. Next suppose that the cost of renting a vehicle falls back down to $100 per day, but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation? Would adding a vehicle under these circumstances increase the firm's profits?

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8 0
3 years ago
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Natalija [7]

Answer:

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Shareholder's equity = Total Assets / Equity multiplier

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8 0
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gizmo_the_mogwai [7]

Answer:

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Explanation:

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4 0
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