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Sergeu [11.5K]
3 years ago
13

If Pete raises his price of muffins from $2 to $3 and his sales revenue increases from $35,000 to $38,000, then:a. this is impos

sible since this would violate the law of demand.b. the demand for Pete's muffins in this range is price inelastic.c. the demand for Pete's muffins in this range is unit elastic.d. the demand for Pete's muffins in this range is price elastic.e. the percentage change in quantity demanded must exceed the percentage change in product price.
Business
1 answer:
ElenaW [278]3 years ago
3 0

Answer:

The correct option is C

Explanation:

Provided rise in price increases the revenue from muffin.

That is by $35,000 to $38,000

Rates per muffin = $2 to $3 revised.

Demand at price of $2 = $35,000/$2 = 17,500 units

Demand at price of $3 = $38,000/$3 = 12,667 units approximately

Thus, with increase in price the demand gets to fall in number, though the revenue has increased.

Since the price is increasing by $1 per unit, thus the range is unit elastic.

The correct statement is C

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Answer:

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3 years ago
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Answer:

The value of the stock = $19.64

Explanation:

According to the dividend valuation model, <em>the value of a stock is the present value of the expected future cash flows from the stock discounted at the the required rate of return.</em>

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1                 $1 × (1.22)  × 1.11^(-1)  =                     1.10

2                 $1 × (1.22)^2 ×(1.11)^(-2) =                1.21

3                 $1 × ((1.22)^2 × (1.05))/0.11-0.05) = 21.35 ( PV in year 2 terms)

PV (in year 0) of Year 3 dividend  = 21.35 × 1.11^(-2)

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<em>The value of the stock</em> = $1.10+ $1.21 + 17.3

                                      = $19.64

Notes:

<em>Note the growth applied to year 3 dividend gives the PV in year 2 terms. So we need to re-discount again to year 0.</em>

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The value of the stock = $19.64

                                     

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3 years ago
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bezimeni [28]

Answer:

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3. $1,680 Unfavorable

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= 60,000 hours

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= Standard hours allowed for actual production × Standard fixed overhead rate

= 6,000 hours × $5

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3. The computation of the total fixed overhead variance is shown below:

= Actual fixed overhead costs - Applied fixed overhead

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