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lyudmila [28]
3 years ago
13

If Ed=2 and price decreases by 1%, by what percentage and in what direction will quantity demanded change?

Business
1 answer:
Arte-miy333 [17]3 years ago
3 0

<u>Given:</u>

Elasticity of Demand = 2

Decrease in price = 1%

<u>To find:</u>

Change in quantity demanded

<u>Solution:</u>

The percentage change in quantity demanded is the mathematical product of the percentage change in price and elasticity of demand. This can be mathematically represented as,

\% \text{ change in quantity demanded }=\% \text{ change in price }\times\text{Elasticity of demand }\\\\ \Rightarrow \% \text{ change in quantity demanded }=1\times2\rightarrow 2\%

Since, there is a decrease in price, the demand for the product will increase. Therefore, we can conclude that there will be 2% increase in quantity demanded

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Answer: INCREASE; DECREASE

Explanation:An unexpected increase in the price of goods and services will cause a temporary output and employment,this is so because producers will respond to the rise in price by increasing the amount of goods and services supplied to the market,this will lead to a rise in employment.

An unexpected decrease in price level will lead to a decrease in the output by producers and employment will drop accordingly. This tries to show how price determines change in supply and employment.

6 0
3 years ago
A year​ ago, the Really Big Growth Fund was being quoted at an NAV of ​$22.28 and an offer price of ​$23.45. ​Today, it's being
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Answer:

9.85%

Explanation:

Data provided in the question:

Initial Offer price = ​$23.45

Current NAV = ​$22.28

Dividends and capital gains distributions over the year  = $1.09 per​ share

Now,

Holding period return

= [Current NAV + Dividends and capital gains distributions - Initial Offer price ] ÷ Initial Offer price

= [ $24.67 + $1.09 - $23.45 ] ÷ $23.45

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or

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4 0
3 years ago
Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consu
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Answer: Elasticity of demand is 7.06

Explanation:

P1= $2,750

P2=$2,880

Q1=446,000

Q2=321,000

Elasticity = \frac{Q2 - Q1}{\frac{Q1 + Q2}{2} } * \frac{\frac{P1 + P2}{2} }{P2 - P1}

Elasticity = \frac{321,000 - 446,000}{\frac{446,000 + 321,000}{2} } * \frac{\frac{2750 + 2880}{2} }{2880 - 2750}

Elasticity = \frac{-125,000}{383,500} * \frac{2815}{130}

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8 0
3 years ago
Chavez Corporation reported the following data for the month of July:
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Answer:

Direct Material Cost for July=$60,600

Explanation:

The direct materials cost for July is is calculated as:

Raw Material in the beginning=$34000

Additional Raw materials purchases=$69500

Total Raw material Available=Raw Material in the beginning+Additional Raw materials purchases

Total Raw material Available=$34000+$69500

Total Raw material Available=$103500

Ending Raw material=$33500

Raw material used in production=Total Raw material Available-Ending Raw material

Raw material used in production=$103500-$33500

Raw material used in production=$70000

Indirect materials included in manufacturing=$9400

Direct Material Cost=Raw material used in production-Indirect materials included in manufacturing

Direct Material Cost=$70000-$9400

Direct Material Cost=$60,600

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