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mina [271]
3 years ago
12

Price of oil in international markets has dropped stunningly 60% in the past twelve months. Among the factors mentioned behind t

his drastic fall is the millions of barrels of oil produced in the US called shale oil. Look at the supply and demand picture for this commodity and try to analyze its price action. Discuss the impact of price elasticity of supply and demand in the short and long terms.
Business
1 answer:
algol [13]3 years ago
6 0

Answer:

Elasticity of demand tends to be more price inelastic in the short run

In the long run, consumers become more aware of alternatives

Elasticity of Supply is the measure of the responsiveness in quantity supplied to a change in price for a specific good

Explanation:

<u>Elasticity of Demand in  Short run</u>

In the short run demand is likely be more inelastic (low = less than 1)

If people are used to buying a good, then when the price goes up, they will tend to keep buying it out of habit. However, when they realise the price rise is permanent they will expend more energy and time in looking for alternatives.

<u>Elasticity of Demand in the Long-run</u>

If the price of a good is expensive for a considerable time period, consumers looking to save money will start trying to find alternatives.

if the goods take a higher percentage of disposable income they may make large changes to their lifestyle.

<u>Elasticity of supply in short-run</u>

The short-run is such a period in which the fixed factors like plants, machinery , etc. cannot be changed. The firm can, therefore raise output by increasing the quantities of variable factors such as labour.

<u>Elasticity of supply in the long-run</u>

The long run supply of a perfectly competitive industry indicates the various quantities of a product offered at various prices. In the long run, the firms can change the existing plant and equipment and they can enter or leave the industry, so that price is always equal to both marginal cost as well as the minimum average cost (Price =LMC = LAC).

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Answer:

Part 1. $500 required

Part 2. $1,500 required

Explanation:

<u>Part 1.</u>

                                     <u>Northern Auto Parts</u>

                                           <u>Cash Budget</u>

<u>Cash Receipts:</u>

                                                         January       February

Beginning cash balance                     10600         10500

Cash receipts from customers            11300          14700  

Cash receipt on note receivable       <u>  6500              0     </u>

Cash available                                     28400        25200

<u></u>

<u>Cash payments:</u>    

Purchases of inventory                         14400           12200

Selling and administrative expenses  <u>  3500            3500  </u>

Total cash payments                          17900           15700

Now

                                                                              $                  $

<u>Cash Receipts:</u>                                                  28400        25200

<u>Cash payments:</u>                                             <u> </u><u>17900         15700 </u>

Ending cash balance before financing          10500           9500  

<u>Less</u>: Ending cash balance Required             <u> 10000          10000 </u>

Projected cash excess                                       500             -500  

Total effects of financing                                 <u>     0                 500  </u>

Ending cash balance                                         10500          10,000

<u></u>

<u></u>

<u>Part 2.</u>

<u>Cash Receipts:</u>

                                                         January       February

Beginning cash balance                     10600         10500

Cash receipts from customers            11300          13700  

Cash receipt on note receivable       <u>  6500              0     </u>

Cash available                                     28400        24200

<u></u>

<u>Cash payments:</u>    

Purchases of inventory                         14400           12200

Selling and administrative expenses  <u>  3500            3500  </u>

Total cash payments                          17900           15700

Now

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<u>Cash Receipts:</u>                                                  28400        24200

<u>Cash payments:</u>                                             <u> </u><u>17900         15700 </u>

Ending cash balance before financing          10500           8500  

<u>Less</u>: Ending cash balance Required             <u> 10000          10000 </u>

Projected cash excess                                       500             -1500  

Total effects of financing                                 <u>     0                1500  </u>

Ending cash balance                                         10500          10,000  

The company will have to borrow $1,500 in the month February.

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Answer:

The answer is below

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Education is considered the basic requirement for the profession because, through education, people get to learn the basic knowledge required to perform a profession.

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Education gives the professional the knowledge to anticipate, predict, and carry out the right solution to any problem that needs to be solved under his or her profession.

For example, a civil engineer needs education in architectural and engineering drawing to translates the drawing into reality or an actual project.

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Answer:

They should be planned for.

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The best way to cater to unexpected expenses is to include them in the budget. Contingencies is the term used to describe funds kept aside to settle unexpected expenses. Without a contingency arrangement, unexpected expenses will affect the budget and a person's ability to pay normal bills.

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