1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Aleonysh [2.5K]
3 years ago
14

Danny "Dimes" Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he

bakes himself. At a price of $2.75 each, he sells 100. At a price of $2.25 each, he sells 300. Instructions: Round your answer to 1 decimal place. a. What is the elasticity of demand? . b. Is demand elastic or inelastic over this price range? . c. If demand had the same elasticity for a price decline from $2.25 to $1.75 as it does for the decline from $2.75 to $2.25, would cutting the price from $2.25 to $1.75 increase or decrease Danny’s total revenue? .
Business
1 answer:
Nina [5.8K]3 years ago
8 0

Answer:

To calculate the elasticity of demand, we need to use mid point elasticity theory.

According to mid point theory,

Ed = [(Q2 - Q1) / {(Q1 + Q2) / 2}] / [(P2 - P1) / {(P1 + P2) / 2}]

Where, Ed = Elasticity o demand

Q1 = Initial quantity = 100

Q2 = New Quantity = 300

P1 = Initial price = $2.75

P2 = New price = $2.25

Ed = [(300 - 100) / {(100 + 300) / 2}] / [(2.25 - 2.75) / {(2.75 + 2.25) / 2}]

Ed = - 5.

a. So, the elasticity of demand is - 5 or in absolute term 5.

b. As the value of elasticity is more than 1, that means, the elasticty over the price range in elastic.

c. From theory, we knew that, when the demand is elastic, then a decrease in price causes a increase in total revenue. Because, as the demand elasticity is elastic, so the increase in output is higher than decrease in price.

Total revenue will increase

You might be interested in
The managers at Movo Automobile Inc. want to diversify their business by acquiring a consumer electronics company. This acquisit
quester [9]

Answer:

C.principal-agent problems.

Explanation:

The acquisition of Movo Automobile is a typical example of AGENCY COST. Under the Agency cost theory, managers are agents of shareholders who represents principal in the principal - agent problem.

Agency cost is a situation where agents become selfish and pursue strategies and policies that will promote the self interest of agents and cause dissatisfaction to principals.

4 0
2 years ago
You purchased 100 shares of IBM common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance ma
Misha Larkins [42]

Answer:

$50

Step by Step Explanation:

100 shares × $70 = $7,000

$7,000 × 0.5 = $3,500 (loan amount)

0.30 = (100P −$3,500)/100P

0.30×100P= 30P

30P = 100P −$3,500

30P- 100P= -70P

−70P = −$3,500

-3500/-70P = $50P

P = $50

The stock price level someone would get a margin call Assuming the stock pays no dividend is $50

4 0
3 years ago
Question 13 Pina Colada Corp. has the following inventory data: July 1 Beginning inventory 108 units at $19 $2052 7 Purchases 37
schepotkina [342]

Answer:

Endign inventory cost= $3,708

Explanation:

Giving the following information:

Purchases 378 units at $20

Purchases 54 units at $22

<u>Under the FIFO (first-in, first-out) method, the ending inventory is calculated using the cost of the lasts units incorporated into inventory:</u>

Ending inventory in units= 180

Endign inventory cost= 54*22 + 126*20

Endign inventory cost= $3,708

5 0
2 years ago
ABC Company’s budgeted sales for June, July, and August are 14,800, 18,800, and 16,800 units, respectively. ABC requires 30% of
aleksandr82 [10.1K]

Answer:

The number of units to be produced in June and July is 16,000 units and $18,200 respectively

Explanation:

The computations are shown below:

Number of units produced in June

= Sale units + ending inventory units - beginning inventory units

where,  

Sale units is  14,800 units

Ending inventory units = 18,800 units × 30% = 5,640 units

Beginning inventory units = 4,440 units

Now put these units to the above formula  

So, the units would equal to  

= 14,800 units + 5,640 units - 4,440 units

= 16,000 units

Number of units produced in June

= Sale units + ending inventory units - beginning inventory units

where,  

Sale units is  18,800

Ending inventory units = 16,800 units × 30% = 5,040 units

Beginning inventory units = 18,800 units × 30% = 5,640 units

Now put these units to the above formula  

So, the units would equal to  

= 18,800 units + 5,040 units - 5,640 units

= 18,200 units

5 0
3 years ago
With an in-kind donation, donors donate<br> time<br> cash<br> nothing<br> goods or services
sattari [20]
Goods and services

Hope I helped
6 0
3 years ago
Other questions:
  • We call the 10 / 30 rule
    14·1 answer
  • Which mission area includes restoring health and social services networks and returning economic and business activities to a he
    10·1 answer
  • Beranek Corp has $720,000 of assets, and it uses no debt--it is financed only with common equity. The new CFO wants to employ en
    6·1 answer
  • Bramble Corporation factors $252,500 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathl
    5·1 answer
  • In an acquisition the firm being purchased is the and the firm which is purchasing the other firm is the
    15·1 answer
  • Which of the following is the correct term to
    9·2 answers
  • A company issued 5-year, 7% bonds with a par value of $200,000. The market rate when the bonds were issued was 6.5%. The company
    14·1 answer
  • Country Club Center sells season memberships for $100 each. Prior to May 1, 2017, 60 season memberships were sold. The season ru
    11·1 answer
  • How can you get your money back if you send a p2p payment to the wrong person?.
    12·1 answer
  • what was one argument made for the construction of the panama canal? responses it would result in lower tariffs on foreign goods
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!