1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Serga [27]
4 years ago
10

Demand for movie rentals is highly elastic. What will happen if a video store raises the price of a rental?

Business
2 answers:
Viktor [21]4 years ago
6 0

Answer: It will lose revenue.

Explanation: Elasticity of demand basically measures the degree of responsiveness of the quantity demanded to a slight change in the price of the commodity/service. Imagine holding an elastic band on one hand and tugging at it with other hand. It will respond to your pull (by stretching), but the length to which it can stretch is it's elasticity. It might be significant or it might be very unnoticeable.

Hence if the demand for movie rentals is described as "highly elastic" it simply means the consumers' response to a slight change in price (either increase or decrease) would be significant. Therefore if a video store raises the price of a rental under the given circumstances, it will lose revenue for sure.

This follows the law of demand that states clearly, "...all things being equal, the higher the price of a commodity/service,the lower the quantity demanded for that commodity/service and, the lower the price of a commodity/service the higher the quantity demanded for that commodity/service." This is a certainty as far as the commodity is classified as a normal good.

adelina 88 [10]4 years ago
5 0

Answer:

It will lose revenue

Explanation:

An elastic demand (which are found in goods or services that have substitutes) moves proportionally to price changes.

It means that, if the price of the good rise, then the demand will diminish. The opposite works the same, if the price reduces, then the demand will grow.

On the other hand, elasticity refers to the impact of the prices on the demand of the goods and there are key factors that influence this relation:

  • Necessity of the good (or product)
  • The existence of substitutes goods or alternatives to those goods
  • Time

You might be interested in
What is one of the first decisions an entrepreneur must make answer.com?
defon
To make money you have to spend money
5 0
3 years ago
Good Foods has net income of $82,490, total equity of $518,700, and total assets of $1,089,500. The dividend payout ratio is .30
dexar [7]

Answer:

5.6%

Explanation:

Internal growth rate can be calculated as below:

Internal growth rate = (Return on asset x Retention Rate)/[1 - (Return on asset x Retention Rate)]

Retention rate  = 1 - Payout ratio = 1 - 30% = 70%

Return on asset = Net income/Asset = 82,490/1,089,500 = 7.6%

Putting all the number together, we have:

Sustainable growth rate = (7.6% x 70%)/[1 - (7.6% x 70%)] = 5.6%

8 0
4 years ago
Molly, the store manager of a bakery, never fails to voice her opinions to her employees on various matters of the store. expres
kolbaska11 [484]
<span>Molly works for the welfare of the employees. She is a very brave women. She has a strong will power. She raises her voice against their problems. She got a lot of supporters, but she also got some haters.</span>
8 0
3 years ago
A manufacturer of widgets was incorporated in and has its principal place of business in State A. The manufacturer also operates
stira [4]

Answer:

Federal arbitration district court

Explanation:

It's so judicial platform to facilitate private dispute resolutions through arbitration, it applies where transactions contemplated by parties involved interstate commerce.

3 0
4 years ago
If anyone can please help asap
KiRa [710]

Answer:

1. Negative externality: Jeff declined to buy his favorite chocolate bar because the price has increased.

2. Dollar vote: increased neighborhood crime is caused by a pawn shop.

3. Public goods: a freeway is available for all to use.

4. Positive externality: public education in the United States results in benefits for others around the world.

Explanation:

1. Negative externality: Jeff declined to buy his favorite chocolate bar because the price has increased. A negative externality arises when the production or consumption of a finished product or service has negative impact (cost) on a third party.

2. Dollar vote: increased neighborhood crime is caused by a pawn shop. A dollar vote describes how the consumer's purchasing power influences the type (quantity) of goods to be produced and supplied to the market.

3. Public goods: a freeway is available for all to use. It refers to any goods that is accessible and available to the general public at all times without an additional fee, charges or cost.

4. Positive externality: public education in the United States results in benefits for others around the world. A positive externality arises when the production or consumption of a finished product or service has a significant impact or benefits to a third party that isn't directly involved in the transaction.

7 0
3 years ago
Other questions:
  • Which of the following statements is CORRECT? a. The DCF model is preferred by academics and finance practitioners over other co
    10·1 answer
  • A major advantage of a sole proprietorship is that _____. the owner is completely responsible for the business decisions the own
    12·2 answers
  • Based on the following data for the current year, what is the number of days' sales in inventory (rounded to one decimal place)?
    6·1 answer
  • A covered call position is A. the simultaneous purchase of the call and the underlying asset. B. the purchase of a share of stoc
    12·1 answer
  • Swift Company purchased a machine on January 1, 2010, for $500,000. At the date of acquisition, the machine had an estimated use
    9·1 answer
  • You have a choice among three options. Option 1: receive $900 immediately. Option 2: receive $1,200 one year from now. Option 3:
    14·1 answer
  • 5. Find an example of a video ad either on TV or on the Internet, and then answer the
    12·1 answer
  • Are unemployment taxes based on wages of an employers payment history?
    10·1 answer
  • Gidgits Galore has been busy during this lesson continuing its expansion plans throughout the United States. After all, everyone
    9·1 answer
  • What are interpersonal skills?
    10·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!