Answer:
A) Price elasticity of demand = 8
B) PED is elastic
C) increase Danny's total revenue
Explanation:
we can calculate the price elasticity of demand using the formula:
PED = % change in quantity demanded / % change in price = [(300 - 100) / 100] / [(1.5 - 2) / 2] = (200 / 100) / (-0.5 / 2) = 2 / 0.25 = 8
if the PED is the same when the price decreases from $1 to $0.50, total revenue will :
- when price = $1.50, total revenue = $1.50 x 300 = $450
- when price = $1, total revenue = $1 x 1,100 = $1,100
*a 33.33% decrease in the price will cause a 266.6% increase (= 33.33% x 8) increase in the quantity demanded = 300 units + (300 x 266.6%) = 300 + 800 = 1,100 units
You didn’t leave choices to pick from
Answer:
$56,950
Explanation:
We will calculate the operating cash flow as follow;
OCF = {[($55 - $28.62) 8,500 ] - $170,000} × (1 - 0.35) + ($62,000 × 0.35)
= {[$224,230] - $170,000} × 0.65 + ($21,700)
= $35,249.5 + $21,700
= $56,950
Therefore, the operating cash flow is $56,950
A high price-earnings ratio for a stock indicates that either the stock is overvalued or people are relatively optimistic about the corporation's prospects.
<h3>What is the price-earnings ratio?</h3>
The price-earnings ratio refers to the ratio of a company's share price to the company's earnings per share. The ratio is used for valuing companies.
The overvalued or people that are relatively optimistic about the corporation's prospects are indicated by a high price-earnings ratio for a stock.
Therefore, D is the correct option.
Learn more about the price-earnings ratio here:
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