Answer:
a-1. The present value of Plan 1 = $93.08
a-2. The deal 2 which involves paying immediately adn taking the 10% discount is better.
Explanation:
a-1.
The interest rate of 5% is taken as the discount rate to convert future cash flows into the present value.
The First payment plan with installments has a present value of,
Present Value-Plan 1 = 25 + 25/1.05 + 25/1.05² + 25/1.05³ = $93.08
a-2.
The first plan will cost $93.08 in the present value.
The second plan will involve immediate payment and a discount of 10%vwhch makes the present value of plan 2 as $90 (100 - (100*0.1)).
Thus, the second deal or deal involving immediate payment and taking the discount is better.
Answer:
C is the correct answer to this question.
Answer: Option D
Explanation: In simple words, movement along the demand curve refers to the change in the demand of a product due to change in its price. When there is a change due to factors other than price then such change brings shift in the demand curve.
In the movement, the demand of a commodity remains constant with all other factors such as advertising, income of consumers etc.
Hence from the above we can conclude that the correct option is D.
True !! Can I be marked as brainliest ?!
Answer:
b. lower price than the pre-subsidy equilibrium, and buyers pay a lower one.
Explanation:
A subsidy is a governments intervention in the form of cash or tax cuts. The government offers subsidies to producers to motivate them to produce more or to lower their cost of production. As a result, there will be more products in the market or goods will be cheaper.
Equilibrium price refers to the price determined by the forces of supply and demand. It is the intersection of the demand and supply curve. It is the price that buyers are willing to pay for a certain quantity of a product; all other factors held constant.
Should a producer receive a subsidy, It will lower his cost of production. The producer's output will cost less. He can afford to offer sellers a lower price as a result of the subsidy. The traders will be able to sell the products in the market at a low price compared to a situation with no subsidy.
