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3 years ago

In words, what does it mean when an economic consultant states:" kevin's income elasticity of red wine is equal to 6?

1 answer:

6 0

When an economist says that "Kevin's income elasticity of red wine is 6" he means that if Kevin's income increases by 10%, the quantity of red wine demanded by Kevin rises by 60%. So, red wine is income elastic. Since the income elasticity is greater than 1, red wine is a luxury good for Kevin.

Income elasticity measures the change in the quantity of goods demanded relative to a change in income.

If an increase in income results in a decrease in the quantity of goods demanded, then that good is an inferior or cheap good. The income elasticity of a cheap good is negative.

If the demand for a good rises with an increase in income, then that good is a normal good. The income elasticity of normal goods is greater than zero.

If an increase in income results in a greater increase in the quantity of goods demanded, then that good is a luxury good. The income elasticity of a luxury good is greater than 1.

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Which strategy is an example of how companies may upgrade themselves to meet changing customer preferences?

never [62]

The best example of how companies are upgrading themselves to meet changing customer preferences is personified in option (C) making online shopping services available.

Since customers nowadays prefer to shop online more often than not, many companies are now providing online marketplaces in combination with their traditional brick and mortar stores. Some companies do not even have a pop up store – they purely do their transactions online.

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3 years ago

To help understand why attendance at the team's games was so poor, the atlanta falcons used marketing research to gather factual

Nataly [62]

The gathering of factual statements is an example of marketing research in its descriptive role.

The descriptive role of marketing research is focused on the gathering of facts to explain the current situation of a market and/or marketing program.

3 0

3 years ago

The market for used cell phones is very popular in Barylia. However, several phones available in this market are of inferior qua

irina1246 [14]

Has only one seller I think

5 0

4 years ago

A high growth software company will pay its first dividend of S0.30 next year. This dividend of . After that, the growth will $0

bija089 [108]

Answer:

The price of the stock today is $3.49. The right answer is A.

Explanation:

In order to calculate the price of the stock today, we need to calculate first Value after year 5 with the following formula:

Value after year 5=(D5*Growth Rate)/(Required return-Growth Rate)

To find D5 we need to make the following calculations:

IF D1=0.3 , hence D2=(0.3*1.1)=0.33 , D3=(0.33*1.1)=0.363 , D4=(0.363*1.1)=0.3993 and D5=(0.3993*1.1)=0.43923

Therefore, Value after year 5=(0.43923*1.05)/(0.15-0.05) =$4.611915

Therefore, now we can calculate the the price of the stock today with the following formula:

current price=Future dividends and value*Present value of discounting factor(rate%,time period)

=0.3/1.15+0.33/1.15^2+0.363/1.15^3+0.3993/1.15^4+0.43923/1.15^5+$4.611915/1.15^5

=$3.49

3 0

3 years ago

You buy a share of The Ludwig Corporation stock for $21.70. You expect it to pay dividends of $1.00, $1.16, and $1.3456 in Years

Vesnalui [34]

Answer:

g = 16%

dividends yield:

Year 1 4.60%

Year 3: 4.78%

expected rate of return:

year 1 20.6%

year 3 20.78%

Explanation:

grow rate:

D1 /D0 = g

1.16/1.00 - 1 = 0.16

1.3456/1.16 - 1 = 0.16

the grow rate is 16%

dividend yield:

dividends/stock price = dividend yield

1/21.7 = 0,0460 = 4.60%

1.3456/28.15 = 0,04780 = 4.78%

expected rate of return:

dividend yield + grow rate

4.60% + 16% = 20.6%

4.78% + 16% = 20.78%

8 0

3 years ago