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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

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snow_lady [41]

the answer is true because of the competition

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3 years ago
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Zoom Enterprises expects that one year from now it will pay a total dividend of $4.7 million and repurchase $4.7 million worth o
Ira Lisetskai [31]

Answer:

$13.34

Explanation:

For computing the today price, first we have to determine the present value of equity which is shown below:

The Present value of equity = Spending amount on dividends and repurchases ÷ equity cost of capital

= $9.4 million ÷ 13.3%

= $70,676,691

Now the share price equals to

= Present value of equity ÷ outstanding shares

= $70,676,691 ÷ 5.3 million shares

= $13.34

6 0
3 years ago
Which microbes is used to extract ethanol from fruit juice and sugar molasses · ​
Sveta_85 [38]

Answer:

Yeast

Explanation:

A microbe (microorganism) is a microscopic organism which either exist in its single-celled form or as colony of cells. Example of microbes are bacteria, archaea, algae, protozoa.

Yeast is a microbe used in the extraction of ethanol from fruit juices and sugar molasses. Saccharomyces cerevisiae is a specie of yeast which reacts with fruit juices and sugar molasses in the absence of Oxygen to produce ethanol and carbon dioxide.

4 0
3 years ago
TTG Landscaping purchased a dump truck for $150,000. In addition, they spent $12,000 in sales tax, $200 to paint the company’s l
Darina [25.2K]

Answer:TTG Landscaping Journal $

1.Dump truck Dr 150,000

Sales tax Dr 12,000

Logo. Dr. 200

Vehicle License Dr 900

Accident insurance Dr 2400

Cash. CR. 165,500

Narration. Being cost incurred on Dump truck and additional expenses incurred to make it usable.

2.

Dump truck Dr1 5500

Sales tax Cr 12,000

Logo. Cr. 200 Vehicle License Cr. 900

Accident insurance. CR 2400

Narration. Transfer of additional cost incurred on Dump truck purchase to Dump truck Accounts

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8 0
3 years ago
Which of the following is true about present value calculations?
Basile [38]

Answer:

The correct answer is letter "B": Other things remaining equal, the present value of a future cash flow decreases if the investment time period increases.

Explanation:

Present Value informs us how much a future sum of money today is worth, given a defined return rate. This is an important financial concept based on the principle that the money received in the future is not worth as much as today's equivalent amount.

For instance, three years from now, $5,000 received is not worth as much as $5,000 received today. If you are investing the $5,000 now, it will be worth more than the original amount assuming a calculated rate of return in two years. Waiting for two years to invest the money is a two-year loss of interest, making the future money worth less than the $5,000 now.

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