Financial assets are priced via the balance of supply and demand.
<h3>
What do the terms supply and demand mean?</h3>
- Supply and demand is an economic theory that describes how prices are set in a market in microeconomics.
- In a competitive market, it is hypothesized that all else being equal, the unit price for a specific good or other traded goods, such as labor or liquid financial assets, will fluctuate until it settles at a stage where the quantity demanded (at the current price) will equivalent the quantity supplied (at the current price), resulting in an economical equilibrium for price and quantity transacted.
- It is the theoretical cornerstone of contemporary economics.
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Answer: Potential competitor
Explanation:
Potential competitor is a competitor
who offers the same product and works in the field.
who has the potential to compete with you.
they could be a direct competitor, but either they don't try or don't have infrastructure.
Hence, A p<u>otential competitor</u> is an organization that is NOT present in a task environment but has the resources to enter.
On the other hand, as a supplier is a party or organization that provides a product or service and distributor distributes them.
Transnet SOC Ltd is a rail, port, and pipeline company in Johannesburg.
Price: This company is a price maker, therefore, in terms of price, Transnet perfect compitetor is a price taker.
Output: Transnet has the ability to decide the quantity of their output and they have many competitors on this one.
<span>Profit: Transnet might be able to increase their profit but in a competition it would be hard because customers might switch to the competitor. </span>
For a firm that sells a prestige product, the relationship between price and quantity demanded is a <u>positive direct relationship</u>.
<h3>Why is the relationship between demand and price of prestige products direct?</h3>
The relationship between the demand and price of prestige products is direct because prestige products tend to sell better at high prices than at low prices.
And when the quantity demanded increases, the price tends to increase.
An example of a prestige product is an old car.
Thus, for a firm that sells a prestige product, the relationship between price and quantity demanded is a <u>positive direct relationship</u>.
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Answer:
Option A-The revenue must be recognized on 31 August.
Explanation:
The accrual concept says that the income must be recognized when they are earned not when the amount is received and expenses when they are incurred not when they are paid.
So according to accrual concept, the entity must deliver its share to recognize sales that is servicing the car. When the entity will service the car then it should recognize the revenue otherwise not. So in accrual basis accounting the date of payment is irrelevant for recognition of revenue and expenses.
