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zubka84 [21]
3 years ago
5

A firm has estimated the following demand function for its product:

Business
1 answer:
Rom4ik [11]3 years ago
3 0

Answer:

(i) Q=300

(ii) Elasticity of Demand=-3.33 (elastic)

(iii) Income Elasticity= 2.5 (normal good)

(iv) Advertising Elasticity: 1.5

Explanation:

The Demand function is given by

Q=100-5P+5I+15A

(1) To solve (i) we need to replace P = 200, I = 150, and A = 30 in the demand equation:

Q=100-5(200)+5(150)+15(30)=300

(2) To find the price elasticity (how much quantity demanded changes with price) we use the point price elasticity formula

\eta_{Price}=\frac{\Delta Q}{\Delta P}\frac{P}{Q}

From the above equation we get: \frac{\Delta Q}{\Delta P}=-5

Replacing in the elasticity formula

\eta_{Price}=-5\frac{200}{300}=|-3.33|>1

in absolute terms the elasticity is bigger than one so it is an elastic demand.

(3) For income elasticity (how much quantity demanded changes with income), we proceed similarly as above. But the derivative is respect to income

\eta_{Income}=\frac{\Delta Q}{\Delta I}\frac{I}{Q}=5\frac{150}{300}=2.5>1[/tex]

Which is bigger than one, denoting this is a normal good because it's bigger than one.

(4) Advertising elasticity (how much quantity demanded changes with expenditures in advertising), we proceed as before

\eta_{advertising}=\frac{\Delta Q}{\Delta A}\frac{A}{Q}=15\frac{30}{300}=1.5

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4 0
2 years ago
The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the desig
NNADVOKAT [17]

Answer:

Option (A) is correct.

Explanation:

Following will be the definitions :

Efficiency = (Actual output ÷ Effective capacity) × 100

Utilization = (Actual output ÷ Design capacity) × 100

Therefore,

Efficiency of the system:

= (950 ÷ 1050) × 100

= 90.47% ( 90.5% rounded to one decimal point)

Utilization :

= (950 ÷ 1,200) × 100

= 79.16% ( 79.2% rounded to one decimal point)

4 0
3 years ago
TLC Credit, Inc. has $35.0 million in consumer loans with an average interest rate of 12.0%. The bank also has $30.0 million in
MissTica

Answer:

$460,000 decrease

Explanation:

The computation of TLC's estimated change in revenues next year is shown below:-

TLC's estimated change in revenues next year = ((Consumer loan × Interest rate) + (Home equity loan × Interest rate) + (Corporate securities × Interest rate)) - ((Increased consumer loan × Decrease rate) + (Increase equity loan × Interest rate) + (Corporate securities × (1 - decreased percentage) × average interest rate))

= (($35.0 million × 0.12) + ($30.0 million × 0.O8) + ($5.0 million × 0.06)) - (($40.0 million × 0.10) +($32.0 million × 0.065) + (5 million × (1 - 20%)  × 0.09))

=$6,900,000 - $6,440,000

= $460,000 decrease

Therefore for computing the TLC's estimated change in revenues next year we simply applied the above formula.

6 0
3 years ago
Gipple Corporation makes a product that uses a material with the quantity standard of 8.2 grams per unit of output and the price
Sunny_sXe [5.5K]

Answer:

Material price variance     <u>2830 unfavorable </u>

Explanation:

Material price variance

<em>A material price variance occurs where materials are purchased at a price either lower or higher than the standard price. A favourable variance is recorded where the actual total cost of materials is lower that the standard cost. While an adverse variance implies the opposite </em>

Standard material cost of 2                                            $

28,300 grams should have cost (28,300×$6.90) = 195270

but did cost (actual cost - 28,300×$7.00)=               1<u>98100 </u>

Material price variance                                                 <u> 2830  unfavorable</u>

<u />

3 0
3 years ago
You put $100 in the bank now, $200 in the bank a year from now, and $300 in the bank in two years. How much money will you have
Paul [167]

Answer:

End of year 3: $677.85

Explanation:

If the interest rate is annual effective:

Year 0 (now): $100

In a year from now I will have:

End of Year 1: $100*1,075= 107.5

Then I put $200 more, i will have $307.5

Begging of year 2: $307.5

In two years from now I will have:

End of year 2: $307.5*1.075= $330.56

Then I put $300 more, i will have $660.56

Begging of year 3: $660.56

In three years from now i will have:

$660.56*1,075= $677.85

End of year 3: $677.85

4 0
3 years ago
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