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LUCKY_DIMON [66]
3 years ago
8

Other things the same, if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent, then in the

short run______a.employment and production both rise.b.and production falls.c.employment rises employment falls and production rises.d.employment and production both fall.
Business
1 answer:
eduard3 years ago
4 0

Answer:

the answer is  d

Explanation:

Other things the same, if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent, then in the short run employment and production falls.

because workers and firms does not prepared for this change,for one hand workers  will  percieve minor wages and they prefer   not work  ,as a consequence the production falls because the firm does not have enough people t acomplish the production.

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Which of the following is a correct statement?
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Answer:

The answer is B.

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3 years ago
Charlie’s Furniture Store has been in business for several years. The firm's owners have described the store as a "high-price, h
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asset turnover formula = net sales / average assets

0.4 = net sales / $800,000

net sales = $320,000

ROI = net income / investment

net income = $320,000 x 34% = $108,800

ROI = $108,800 / $800,000 = 13.6%

b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns.

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c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required?

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d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.

An extensive market research and a "successful" marketing campaign are generally expensive. Even if the marketing campaign is really successful in increasing sales, costs would also increase. So the equation may or may not change, depending if the contribution margin of the additional units sold will be able to cover the expenses of a complex marketing campaign. If you spend $100 to earn $100 more, your situation hasn't changed at all. Which means that net income may or may not increase, therefore, the profit margin, ROI and asset turnover may not change.

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