I think more people will be willing to pay for a product that increases by .25 cents even as a small amount over $5 to $7.50 because it is still a small amount in comparison. Although in relateion to the changes, 25 cents with an amount so small is similar to $2.50 on a larger dollar amount, they are stillseeing a larger dollar amount increase.
Answer:
A) Price elasticity of demand (PED) = 1
B) the PED is unitary
C) Danny's total revenue will decrease to $562.50
Explanation:
A) the formula for calculating price elasticity of demand is:
PED = % change in quantity demanded / % change in price
- % change in quantity demanded = (300 - 250) / 250 = 50 / 250 = 20%
- % change in price = ($2 - $2.50) / $2.50 = -$0.50 / $2.50 = -20%
PED = 20% / 20% = 1
B) the PED is unitary, it means that for every 1% change in the price, the demand will inversely change in 1%
C) since Danny lowered its price 20% from $2.50 to $2, he sold 20% more brownies, but his total revenue fell from $625 to $600. If he lowers his price even more, this time 25% to $1.50, his total sales will increase to 375 brownies, but his total revenue will continue to fall to $562.50
Answer:
The correct answer is C
Explanation:
Investment spending is the money spent on the goods which are used in the productions of capital, goods or services and if it is decreasing means that it repeal or revokes the investment tax credit, which means decrease in income tax.
And the aggregate demand which shifted to left means that the consumer spending is declining or decreasing ad it will lead to shift the curve to the left side.
<span>This is the current value of cash inflows.
NPV helps determine the net present value of opportunities (such as whether or not company A's investment is better than company B's investment, or if one should take Project 1 over Project 2). NPV must take into account budgeting aspects into its calculation.</span>