Answer:
The profit will decrease.
Explanation:
For example, if the company increases the value of the product to its customers and incurs a cost of $200 per unit in doing so while it increases the selling price by $150. This implies that its profit will decrease by $50 because anytime the cost is more than the selling price of a product, there is a reduction in the profit margin. However, this remains true in the short-run. However, in the long-run, when customers start appreciating the increased value of the product, demand for the product may skyrocket, leading to an increase in price. By this time, the company will recover more cost and even report a higher profit margin.
Mr. Rational is a utility maximizer, he should buy less of X and more of Y.
<h3>What do you mean by marginal utility?</h3>
- In economics, marginal utility refers to the additional pleasure or benefit (utility) a buyer receives by purchasing an additional unit of a good or service.
<h3>What is marginal utility and formula?</h3>
- The general rule in economics is that marginal utility equals total utility change divided by change in quantity of goods.
- The equation looks like this Total utility difference divided by amount of commodities difference equals marginal utility.
- Find the first event's overall utility.
According to the question:
The amount that Mr. Rational is going to spend = $27.
Quantity of good X = 5 units.
Price of good X (Px) = $3 per unit.
Marginal utility of 5th unit of X (MUx) = 30.
Quantity of good Y = 6 units.
Price of good Y (Py) = $2 per unit.
Marginal utility of 6th unit of Y (MUy) = 18.
Now find
Now
Since the
So, good x will be substituted for y in order to reach the consumer equilibrium.
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Answer: Ostrich is underestimating the costs for which in addition to costing 98 billion per year, to collect that money they will have to collect more taxes. This will cause that when the income tax increases, the workforce produces a lower net return making the opportunity cost of leisure less and this can result in those who pay taxes to finance the program reduce their working hours reducing productivity
It is also possible that the proposed benefits have a negative effect on people by inducing them to work less to access these benefits while also reducing overall productivity.
Answer:
Explanation:
Before preparing the retained earning statement, First, we have to compute the ending balance of the retained earning account.
The formula to compute the retained earnings ending balance is shown below:
The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid
= $17,200 + $10,400 - $6,000
= $21,600
The ending balance of retained earnings is shown in the attached spreadsheet.
Answer:
Induced consumption is the portion of consumption that varies with disposable income. When a change in disposable income “induces” a change in consumption on goods and services, then that changed consumption is called “induced consumption”. In contrast, expenditures for autonomous consumption do not vary with income.
Explanation: