Answer:
The demand for Post Raisin Brand cereal is: ELASTIC
the demand for all types of breakfast cereals is: INELASTIC
Explanation:
To calculate the price elasticity of demand (PED) we can use the following formula:
PED = % change in quantity / % change in price
- If PED > 1, the demand is price elastic
- If PED = 1, the demand is price unitary
- If PED < 1, the demand is price inelastic
*The PED always results in a negative number, e.g. price deceases, quantity increases, but for practical reasons we convert the negative number into a positive (we use absolute values) when we are determining the elasticity.
Answer:
Self Interest & Invisible Hand of Laissez Faire Policy
Explanation:
Adam Smith Laissez Faire Policy - suggests that free markets are the best approach for welfare maximisation of a society, based on self interest guiding best decisions by individuals, and individual wealth & welfare maximisation implies society wealth & welfare maximisation.
The Invisible Hand of free markets corrects all the discrepancies (if any), re-guides self interest forming the basis of over all social interest. Government intervention is unnecessary & distortionary as per the theory
$67,500
cost of the wages that you could be earning + loans + lost interest
45000 + 22000 + 500 = 67,500
Answer:
-0.578 and inelastic
Explanation:
The computation of the price elasticity of demand using mid point formula is shown below:
= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in price ÷ average of price)
where,
Change in quantity demanded would be
= Q2 - Q1
= 90,000 - 100,000
= 10,000
And, average of quantity demanded is
= (90,000 + 100,000) ÷ 2
= 95,000
Change in price would be
= P2 - P1
= $12,000 - $10,000
= $2,000 0.1052 0.1818
And, average of price is
= ($10,000 + $12,000) ÷ 2
= $11,000
So, after solving this, the price is -0.578
This reflects the inelastic for diamond rings
more productivity means more product meaning less stress on demand and lower prices.
