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Vlad1618 [11]
3 years ago
14

Minarski Electronics sells computers and provides hardware maintenance services. On April 1st, Minarski sold a package deal cont

aining a computer and a one-year unlimited maintenance/repair service for the computer at a bundle price of $1,000. If sold separately, the computer costs $696 and the one-year unlimited maintenance/repair service costs $504. How much revenue does Minarski Electronics recognize for the month ended April 30th, assuming that revenue is accrued monthly?
Business
1 answer:
Sav [38]3 years ago
3 0

Answer: Total revenue recognized=(580+35)=$615

Explanation:

Total value of revenue=(696+504)=$1200

Hence revenue to be recognized in April will be computed as follow:

Computer =\frac{696}{1200}\times bundle price

=\frac{696}{1200}\times 1000

=$580

Repairs  =\frac{504}{1200}\times bundle price \times \frac{1}{12}

=$35

Hence total revenue recognized=(580+35)=$615.

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Answer:

midpoint method for income elasticity of demand = {ΔQD / [(QD₀ + QD₁)/2]} / {ΔI / [(I₀ + I₁)/2]}

midpoint method for price elasticity of demand = {ΔQD / [(QD₀ + QD₁)/2]} / {ΔP / [(P₀ + P₁)/2]}

a) I will use the information from January and February to calculate the price elasticity of demand of Coke. I cannot use March instead of January because income increased during that month.

QD₀ = 14

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P₁ = 3

PED = {(10 - 14) / [(14 + 10)/2]} / {(3 - 2.4) / [(3 + 2.4)/2]}

PED = {-4 / 12} / {0.6 / 2.7} = -0.3333 / 0.2222 = -1.5 or |1.5| in absolute terms

Coke's PED is elastic since a 1% change in price will result in a larger proportional change in the quantity demanded.

b) I will use the information from January and March to calculate the income elasticity of demand of Coke. These are the two months where income changes but price of Coke remains the same.

QD₀ = 14

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PED = {(20 - 14) / [(14 + 20)/2]} / {(500 - 300) / [(300 + 500)/2]}

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6 0
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