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BartSMP [9]
3 years ago
11

Suppose Pump-U-Up lowers the price of its gym membership by 10 percent and as a result, Sweat-It-Out experienced a 16 percent de

cline in its gym membership. What is the value of the cross-price elasticity
Business
1 answer:
konstantin123 [22]3 years ago
5 0

Answer:

The Cross elasticity of demand will be the change in demand at Sweat-it-out divided by the change in price at Pump-U-Up

=-0.16/-0.1

= 1.6

Explanation:

The Price decrease from Pump-U-up = 10%

And the resultant decline in Gym membership at sweat-it-out is 16%

The Cross elasticity of demand will be the change in demand at Sweat-it-out divided by the change in price at Pump-U-Up

=-0.16/-0.1

= 1.6

A Positive Cross - Price elasticity indicates both Gyms are close substitutes of one another.

An attempt by one to lower its price will directly impact negatively in membership of the other.

The strategy often adopted in such line of Business is to keep prices at Par or offer distinctive services outside of the traditional, e.g include a Spar into the gym membership, or access to discounted toning or body building products etc.

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Identify whether the statements below are true or false by dragging and dropping the appropriate term into the bin provided.
Tema [17]

<u>Solution and Explanation:</u>

1. False-   Long run Economic growth is likely to be sustainable because of finite natural resources as othe man made resources will be available to sustain growth.  

2. False-    In mordern economy posesing few natural resources will not affect a country to develop economically; human resources and man made resources will also contribute. Foreign trade can also play an important role towards growth, in the absence of abundant natural resources.

3. True-   Natural resources are vital, and mostly exhaustible. Hence it is very essential to find suitable alternatives.

4. False- Economies of 21st century depend on human capital due to depletable atural resources.

5. True - In the 19th century, minerals and farming land were the most mportant resources, since self sustainability was in vogue.

7 0
4 years ago
Explain how test-marketing can increase profits.
kirill [66]

Answer:

Test marketing holds a lot of importance for the company. It allows

the company to test their product in a small region so as to get an

idea whether the product will work in a bigger market or not.

Through this, the company can measure the performance of the

product and can decide whether it should be released nationwide

for sale. Through this, the company can estimate the earnings that

can be earned through this product beforehand.

Explanation:

7 0
3 years ago
Dividends paid to common stockholders ______ be deducted from the payer's taxable income for tax purposes.
Grace [21]

Dividends paid to common stockholders cannot be deducted from the payer's taxable income for tax purposes.

<h3>What is Dividend Payments?</h3>

Dividends are paid only on outstanding shares of common stock. Since the payments are the distribution of a company's profits to its shareholders, dividend payments decrease both the cash and the shareholders' equity balance shown on the issuing corporation's balance sheet.

Since they are paid on each share, the amount of cash distributed to each shareholder is based on the amount of shares they own.

<h3>Are dividends paid to common stockholders?</h3>

Dividends are paid only on outstanding shares of common stock.

A common stock dividend is the dividend paid to common stock owners from the profits of the company. Like other dividends, the payout is in the form of either cash or stock. The law may regulate the size of the common stock dividend particularly when the payout is a cash distribution tantamount to a liquidation.

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3 0
2 years ago
walmart and the home depot emphasize consistently low prices rather than periodic discounts with a retail pricing strategy calle
Dvinal [7]

Walmart and Home Depot emphasize consistently low prices and eliminate most of the markdowns with strategy called everyday low pricing.

<h3>What is everyday low price?</h3>

Everyday low price is a pricing strategy that assures customers of a cheap price all the time without forcing them to wait for discount price occasions or comparison shop. In addition to saving retail businesses the time and money required to mark down prices during sales, EDLP is also thought to increase customer loyalty. An EDLP retailer's price will typically fall between a high-low retailer's discounted price and its non-discounted price. It is typical for rival shops to divide the market into segments using various pricing heuristics. The segments are made up of two distinct groups of consumers with various buying habits for both final purchases and pre-purchase research. They are prepared to conduct research to find discounts and to stockpile goods when deals are available.

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8 0
1 year ago
A firm operated at 80% of capacity for the past year, during which fixed costs were $210,000, variable costs were 70% of sales,
Fittoniya [83]

Answer:

The answer is: $90,000

Explanation:

We must first determine the cost of goods sold:

  • COGS = variable costs = 70% x 1,000,000
  • COGS = $700,000

I will assume all fixed costs are operating expenses.

Then we elaborate a simple income statement:

Sales                           $1,000,000

<u>COGS                           ($700,000)   </u>

Gross profit                   $300,000

<u>Operating expenses    ($210,000)   </u>  

Operating profit             $90,000

5 0
3 years ago
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