Answer:
The demand for candy bars is inelastic
Explanation:
The midpoint rule calculate the price elasticity of demand as percentage change in quantity divided by the percentage change in price:
<u>% change in quantity </u>
The quantity demanded increased from 500 to 600. We have
<u>% change in price</u>
The price changed from 1 dollar to 0.8 dollars.
Price elasticity if demand is
The negative sign tells us that there is an inverse relationship between price and quantity demanded.
Since 0.82 is less than 1, the demand for candy bars is inelastic
Answer:
The correct answer is $83230
Explanation:
Solution
Given that:
The Present worth of geometric series is shown below
= A *[1 - (1+g)^n /(1+i)^n] / (i-g)
Now,
The present cost of worth from EOY 5 to EOY 13 at EOY 4 = 7000 *[1 - (1+0.12)^9 /(1+0.15)^9] / (0.15-0.12)
Thus,
= 7000 *[1 - (1.12)^9 /(1.15)^9] / (0.03)
Which is,
= 7000 * 7.0572647
= 49400.85
Now, The NPW of all costs = 35000 + 7000*(P/A,15%,4) + 49400.85*(P/F,15%,4)
= 35000 + 7000*2.854978 + 49400.85*0.571753
= 83229.93
Therefore the sound improvement better result in a net present worth profit of how much to negate the costs is $83229.93 or 83230
Note: EOY = End of year.
Answer:
cost-based transfer pricing
Explanation:
If the firm uses negociated rtansfer pricing they will stablish the transfer price based on manager bargain skill and leverage of each division. The CEO will not a grip on controlling cost across all dvisions, the managers will.
Therefore the best option is to go with a cost-based transfer pricing. The CEO can determinatethe method to determinate the cost and indriectly the cost across all divisions.
Answer:
that he should reduce his prices. Yachts are luxury goods and therefore exhibit a high price elasticity of demand. Thus, reducing prices would increase revenue.
Explanation:
Luxury goods usually have a high elasticity of demand when compared with necessity goods which are highly inelastic.
An elastic demand means that a change in price would have a considerable impact on quantity demanded.
Therefore, if the price of the yachts which is a luxury good with high elasticity is reduced, demand for yachts would increase and revenue would increase.
Answer:
$5 million
Explanation:
If we follow the Coase Theorem, the appropriate solution to this case should be obtained regardless of initial rights. In this case, the factory saves $5 million to the producer, but it costs $10 million to Boston residents. if Boston residents pay $5 million or more to the factory owner, then both would benefit. Boston residents will gain $10 - $5 = $5 million, as well as the factory owner.
