Considering the situation above, by building a strong brand, Wilson has effectively "<u>reduced the price elasticity of demand for its products</u>."
This is because the price elasticity of demand is a term in economics that defines the sensitivity of the quantity demanded of a commodity to its price.
Usually, the price elasticity of demand shows that when the price of a commodity increase, the quantity demanded decreases.
Thus, in this case, since it is said that Kendra allowed Wilson to charge a higher price and not lose many sales, therefore, Wilson has been able to reduce the price elasticity of demand for its products.
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Answer:
Explanation:
A. Supply stays the same, demand decreases since restaurants are normal goods. As a result, the equilibrium price and the equilibrium quantity will go down.
B. In the short run, the existing firms reduce their output causing Q* to fall. In the long run, as firms exit, Q* falls even further.
C. An individual firm may produce in the short run, but exit from the industry in the long run. As a result, the firm will decrease its quantity produced up to 0. Therefore, in the long run the output of an individual firm may change drastically comparing with the short run.
Answer:
You will pay $744,680.85 for the policy
Explanation:
Step 1
Since cash flow is a perpetuity, we can derive the following expression;
P.V=C/r
where;
P.V=present value of the investment
C=cash flow
r=annual rate of return
In our case;
P.V=unknown
C=$35,000
r=4.7%=4.7/100=0.047
replacing;
P.V=35,000/0.047
P.V=744,680.8511
744,680.8511 rounded off to 2 decimal places=744,680.85
You will pay $744,680.85 for the policy