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poizon [28]
3 years ago
13

For a particular good, a 12 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following s

tatements is most likely applicable to this good? a.There are many substitutes for this good. b.The good is a necessity. c.The market for the good is narrowly defined. d.The relevant time horizon is long.
Business
1 answer:
Charra [1.4K]3 years ago
3 0

Answer:

b.The good is a necessity

Explanation:

The price elasticity of demand = percentage change in quantity demanded/ percentage change in price

3% / 12% = 0.25

When the coefficient of elasticity is less than one, demand is inelastic.

Inelastic demand means that when price increases, there is little or no change in quantity demanded.

Necessity goods are goods that are very important to consumers and thus they tend to have an inelastic demand. For example, medications.

Substitute goods are goods that can be used in place of another good because of their similarity. E.g. butter and margarine

Goods with many substitutes have an elastic demand. If price of a good increases, consumers can easily shift consumption to substitute goods.

Narrowly defined goods have an elastic demand because it is easier to find subsituites for such goods.

Demand is more elastic in the long run because consumers have more time to search for substitutes.

I hope my answer helps you

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If a firm has a limited capital budget and too many good capital projects to fund them all, it is said to be facing the problem
nexus9112 [7]

Answer:

"Capital rationing" would be the appropriate answer.

Explanation:

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Demand is not the same as quantity demanded. What factors will change the demand for a good?
DochEvi [55]

Answer:

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2 years ago
Find the principal P that must be invested at rate r, compounded monthly, so that $1,000,000 will be available for retirement in
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Answer:

$224,174

Explanation:

Note : I have uploaded the full question below :

The Principle P that is required can be calculated from the given data though discounting future cash flows as follows :

FV = $1,000,000

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t = 20 × 12 = 240

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Pmt = $0

PV = ?

Using a Financial Calculator to input the values as shown above, the PV would be $224,174 . Thus, the principal P that must be invested must be $224,174.

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