Answer:
- 0.80
Explanation:
Price elasticity of demand describes the extent to which the quantity demanded of good X changes as result of a change in its own price.
The midpoint formula for price elasticity of demand is presented and used as follows:
Percentage change in quantity = %ΔQ = [Q2 - Q1] / [(Q2 + Q1) ÷ 2] × 100
Percentage change in quantity = %ΔP = [P2 - P1] / [(P2 + P1) ÷ 2] × 100
Midpoint price elasticity of demand = %ΔQ / %ΔP
Where:
Q2 = New quantity of good X = 150
Q1 = Initial quantity of good X = 100
P2 = New price of good X = $6
P1 = Initial price of good X = $10
Therefore,
Percentage change in quantity = %ΔQ = [150 - 100] / [(150 + 100) ÷ 2] × 100
= [50/(250 ÷ 2)] × 100
= (50/125) × 100
= 40.00%
Percentage change in quantity = %ΔP = [$6 - $10] / [($6 + $10) ÷ 2] × 100
= [-$4/($16 ÷ $2)] × 100
= (-$4/$8) × 100
= - 50.00%
Price elasticity of demand = 40% / 50% = - 0.80
The elasticity of demand of -0.80 less than 1. That indicate that the quantity demand is inelastic. That is the change in the degree of change in the quantity demanded of good X is lower than the degree of change in its price.
If firms decide to use comparison advertisements they have to make sure the advert stays within legal requirements.
This link will make things clearer:
https://www.investopedia.com/terms/c/comparative-advertising.asp
Hope this helps
Answer:
(D) higher prices lead to higher profit and higher output.
Explanation:
When the price increase, the profitability of the firm increase, therefore firm produces more at high price. Hence at high price output increase. This is the reason why SRAS curve is positively sloped.
Answer:
evaluate performance and take necessary corrective action plan for plant asset purchases and disposals
Explanation:
A budget is an estimate of the revenue and expenditure of a company over a specified period.
