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3 years ago

A firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are $10,000 and...?

Business

1 answer:

creativ13 [48]3 years ago

7 0

Answer:

The correct answer is (d) Decrease total revenues from X and Y by $600

Lets first calculate change in revenue due to good X

TR = P*Q

where TR = Total revenue , P = Price and Q = Quantity

Formula :

% change in (A*B) = % change in A + % change in B

Thus % change in TR = % change in (P*Q) = % change in P + % change in Q

Own Price Elasticity of demand of X = % change in quantity of X / % change in Price of X

It is given that, Own Price Elasticity of demand of X = -4 and % change in Price of X = -2% (negative sign means that price has decreased)

Hence, -4 = % change in quantity of X / (-2) => % change in Quantity of X = 8%.

Here % change in Q = 8% and % change in P = -2%

% change in (TR) = % change in (P*Q) = % change in (P) + % change in (Q) = -2 + 8 = 6%

Hence Revenue due to good X increases by 6%.

So change in revenue due to Good X = 6% of 10,000 = (6/100)*10000 = 600

Now Lets first calculate change in revenue due to good Y

TR = P*Q

where TR = Total revenue , P = Price and Q = Quantity

Formula :

% change in (A*B) = % change in A + % change in B

Thus % change in TR = % change in (P*Q) = % change in P + % change in Q

Cross Price Elasticity of demand between X and Y = % change in quantity of Y / % change in Price of X

It is given that, Cross Price Elasticity of demand between X and Y = 2 and % change in Price of X = -2% (negative sign means that price has decreased)

Hence, 2 = % change in quantity of Y / (-2) => % change in quantity of Y = 2*(-2) = -4.

Here % change in Q = -4% and % change in P = -2%

% change in (TR) of good Y = % change in (P*Q) = % change in (P) + % change in (Q) = -2 + (-4) = -6%(negative sign means that TR will decrease)

Hence Revenue due to good Y decreases by 6%.

So change in revenue due to Good Y = -(6% of 20,000) = (6/100)*10000 = -1200 (negative sign means that revenue will decrease)

Hence Overall change in total revenue = Change in Revenue due to good X + Change in Revenue due to good Y

=> Overall change in total revenue = 600 + (-1200) = -600

Hence Overall Revenue will decrease by 600

Hence, the correct answer is (d) Decrease total revenues from X and Y by $600

Explanation:

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A MAIN reason cited by American businesses for outsourcing jobs to other countries is the high cost of

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Answer:

The correct answer is A. A main reason cited by American businesses for outsourcing jobs to other countries is the high cost of labor in the United States.

Explanation:

Outsourcing means separating from the organizational structure of the enterprise some functions performed by them independently and transferring them to other entities for execution. This decentralization process is very evident in American companies that produce manufactured goods, which place the primary production processes in other countries such as China, Mexico or Vietnam, among others, to produce their products at a lower cost, given the lower costs. labor (lower wages, lower taxes, less expensive regulations, etc.).

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3 years ago

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What is one financial goal that you have? How do larger economic factors influence your pursuit of this goal?

MA_775_DIABLO [31]

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3 years ago

_________ forecasting method is well suited to situations in which sales forecasts are needed for a large number of products.

nikdorinn [45]

Answer:

D. Moving averages

Explanation:

Moving averages is a method of forecasting which is adopted to receive an overall idea of the trends for a given data

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3 years ago

11. If you want to have a return for your Final Portfolio (that is invested between Optimal Risky portfolio and Risk Free Securi

melamori03 [73]

Answer:

Answer is explained in the explanation section.

Explanation:

Note: First of all, this question is incomplete and lacks necessary data to calculate this question. However, I have found the similar question on the internet with complete data given. Additionally, I have shared that data as well in the attachment below for your convenience, Thanks.

Solution:

SD = Standard Deviation

Using utility function, E(R) = Rp - 0.005 x A x $SD^{2}$ = 1.34 - 0.005 x 3x $4.06^{2}$

Using utility function, E(R) = 1.093%

If the weight in the risky portfolio is let's say, "a" then,

weight in the risk-free asset = 1 - a

So,

E(R) = a x Rp + (1 - a) x Rf

1.093% = a x 1.34% + (1 - a) x 0.50%

Solving for "a"

a = 70.56% - weight in risky portfolio

and 1 - a = 29.44% - weight in risk-free asset.

Similarly, if you want a return of 1.10%,

we can follow the above steps and get

1.1% = a x 1.34% + (1 - a) x 0.5%

Weight in risky portfolio,

a = 71.43%

weight in risk-free asset,

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3 years ago

investment is made at r percent compounded annually, at the end of n years it will have grown to A = P(1 + r)n . An investment m

bixtya [17]

Answer:

$1,500

Explanation:

Given the compounding formula $A = P(1+r)^{n}$

And given an investment (P), made at 16% compounded annually (r), and an ending amount of $1,740 (A) at the end of the year (n = 1 year), the original amount invested (P) can be computed as follows.

$1,740 = P(1+0.16)^{1}$

$1,740 = P * 1.16$

= P = 1,740/1.16 = 1,500.

Therefore, the original investment was $1,500.

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3 years ago