Answer:
Equilibrium quantity: 145
Equilibrium price: $140
Explanation:
In order to find the answer, first we determine the current difference between quantity supplied and quantity demanded.
Quantity supplied - quantity demanded = difference
125 - 165 = -40
So we have a shortage of -40 units.
We have the information that a $1 increase in price increases supply by 2, and decreases demand by 2. Thus, in order to close the shortage, we need a $10 price increase, because this will raise supply by 20 units, and lower demand by 20 units as well, bringing the 40 gap to 0.
For this reason, the equilibrium quantity is 145 units, and the equilibrium price is $140.
Answer:
The amount customers are expected to pay $7600 per bond
Explanation:
8M implies that the municipal bond has $8000 as its par value.
The amount a customer would is 95% of the par value
Hence, customers are expected to pay $7600 (95%*$8000)
For instance a 5M at 105 means that the par value of the bond is $5000 but issued at 105%, which translates into $5250 without considering commissions as well as the accrued interest on the bond which might also be factored into the price.
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Answer:
The idea behind opportunity cost is that the cost of one item is the lost opportunity to do or consume something else; in short, opportunity cost is the value of the next best alternative. Click to see full answer Herein, what is opportunity cost give example? Opportunity cost is the profit lost when one alternative is selected over another.
Explanation:
