Answer:
The correct answer is: increase; decrease.
Explanation:
According to the demand theory if the price of a good increases the quantity demanded decreases. If the price of the good decreases, the quantity demanded increases. We can say then that the relationship between the price and the quantity demanded is inversely proportional.
In that case, if peanut butter and jelly are usually sold together and the price of jelly increases, so will the price of the peanut butter. Thus, the quantity demanded of both the peanut butter and jelly will decrease.
Answer:
A. 7.08%
B. 6.49%
C. 5.95%
D. 6.71%
E. 7.34%
The correct option is B,6.49%
Explanation:
The return that the investor would earn is the yield to maturity of the bond which is calculated using rate formula in excel as shown thus:
=rate(nper,pmt,-pv,fv)
nper is the number of coupon payments the bond would receive which 5 since the bond can be called in 5 years
pmt is the annual coupon of $85
pv is the current market price of $1,120
fv is the call price in 5 years which is $1,050
=rate(5,85,-1120,1050)=6.49%
Since your town was impacted in a negative way by the flooding the demand for home improvement items will be high. When demand is high and supply is low it can drive up prices. Most stores would definitely take advantage of this supply and demand case because they could turn a bigger profit. That would be a motivating reason for some people or companies.
As for me personally, I would not raise prices in my business because I feel that is taking advantage of people in a bad situation. You know that they are going to need to supplies to help them fix flood damage and they will have no option but to buy the needed materials. However, if you raise prices it could backfire on you and they may go somewhere else to get the materials needed instead of shopping with you.
