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Vinvika [58]
3 years ago
5

The market for land is competitive and in equilibrium at the rental rate of $500 per acre and the supply of land is perfectly in

elastic at 1000 acres. If the demand for land falls and the rental rate falls to $400 per acre, the total economic rent on this land _____ by _____.
Business
1 answer:
Elina [12.6K]3 years ago
5 0

Answer:

Falls by $100,000

Explanation:

In this question, we are asked to calculate and state what happens when demand for land falls and as a result, there is also a fall in rental rate.

Firstly, we cost the total of 1000 acres. The price of 1000 acres is simply the multiplication of the 1000 acres by the $500 unit price= 500 * 1,000 = $500,000

We now calculate the price or worth of the land when demand falls

This is mathematically equal to 400 * 1000 = $400,000

Now, the net economic rent fall would be $500,00 - $400,000 = $100,000

Hence, there would be a fall of $100,000 as the demand for land falls

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Answer:

a. $90,000 favorable

Explanation:

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3 years ago
Starbucks is a global company that provides high-quality coffee products. Assume that as part of its expansion strategy, Starbuc
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No, there is not any requirement of recording when the fair value of bonds decreases to $6000000 on December 31 of the current year.

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There is not any requirement of any recording when the fair value decreases to $600000 because it is not affecting our books of accounts because in our books they are recorded at face values.

Hence there is not any requirement of recording when the fair value of bonds decreases to $6000000 on December 31 of the current year.

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2 years ago
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