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3 years ago

Refer to Exhibit 3-6. If a decrease in income causes the demand for good X to shift from D1 to D2, then good X is ____

Business

2 answers:

sergeinik [125]3 years ago

7 0

Answer:

An inferior good

Explanation:

First of all, It is important to understand the behavior of the demand curve, if the demand for a good X causes the demand curve to shift from D1 to D2, this means there is an increase in demand.

If a good increases in demand when there is decrease in income, the good is an inferior good because this is a good that is demanded when buyers have to spend cautiously, this means inferior goods are the opposite of normal goods and buyers would normally not demand such items. Such goods could be inferior either in terms of quality, method of production, manufacturers, e.t.c.

stiv31 [10]3 years ago

3 0

Answer:

(D) an inferior good.

Explanation:

The inferior good had a negative relationship between income and demand.

When the income is lower, the demand increases as people moves away from normal goods to inferior as they are cheaper. And it will decrease once the income level return to his previous level.

This causes even more troubles in recessions to normal company's as the demand decrease and also, it shift to other goods.

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Suppose that there are only two small countries in the world: ascot, with a population of 37 comma 500 people, and delwich, w

FromTheMoon [43]

Answer: The price of the tied good is $27.

Explanation: The practice of tying is used to package products in such a way that the price of the tied (combined) good is closer to the buyers total willingness to pay for the two goods.

In this case, the total willingness to pay of Carnivore is $20+$7=$27

While, that of Leafygreens is $8+$12=$20

Thus, the producer will sell the combined good at $27 as it will give him more revenue.

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3 years ago

Firms use various methods for identifying customers such as ________ and ________.

Rashid [163]

Answer:

The correct answer to the following question is option A) .

Explanation:

One way in which firms identify customer is through observational characteristics which can be age, by knowing the average of their target customers , a firm can know whether their target customers would be willing to wait in long lines or not for getting the firms product. As if their target customers mainly consists of old age then those customer won't be willing to wait in long lines to get the product.

3 0

3 years ago

At year-end (December 31), Chan Company estimates its bad debts as 0.70% of its annual credit sales of $862,000. Chan records it

KiRa [710]

Answer: Please see the required journals below:

December 31:

Debit Bad debt expense $6,034

Credit Allowance for doubtful accounts $6,034

February 1:

Debit Allowance for doubtful accounts $431

Credit Accounts receivables $431

June 5:

Debit Cash $431

Credit Bad debt recovery (income statement) $431

Explanation: The company estimates its bad debt expense as percentage of sales. In this case 0.7% of its annual sales of $862,000 was deemed as uncollectible, that is, 0.7% x $862,000 = $6,034. The required journals to recognize this bad debt expense is provided above. However, since there was an existing provision, which resides in the allowance account, a write-off would definitely hit that account in order to extinguish the accounts receivable portion. Upon recovery of the write-off, we cannot reinstate the receivable since it was already extinguished but we need to recognize the recovery as a gain.

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3 years ago

Read 2 more answers

A proprietorship has three important advantages: (1) It is easily and inexpensively formed, (2) it is subject to government regu

Umnica [9.8K]

Answer:

<em>A proprietorship has three important advantages: </em>

(1) It is easily and inexpensively formed,

(2) it is subject to few government regulations, and

(3) it is subject to lower income taxes than are corporations.

<em>However, a proprietorship also has three important limitations: </em>

(1) A proprietor has personal liability for the business' debts.

(2) The life of the business is limited to the life of the individual who created it.

(3) A proprietorship has difficulty obtaining large sums of capital so proprietorships are used primarily for small businesses.

As all company structures, proprietorships have both advantages and disadvantages. Although the advantages mainly relate to feasibility, the disadvantages are often overlooked. The main disadvantage is the total liability of the owner, which is detrimental if the business faces tough times, which lead to liquidation.

5 0

3 years ago

Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboa

podryga [215]

Answer:

Contribution margin ratio:

For East Coast = 10%

For West Coast = 8.05%

Explanation:

As per the data given in the question,

Contribution margin by sales territory report :

C C S Inc.

Contribution margin by Territory

Particulars East Coast West Coast

Sales (a) $8,400,000 $8,610,000

(30,000×$280)+(0×$130)

(21,000×$280)+(21,000×$130)

Less: variable cost of goods sold(b) $6,600,000 $6,657,000

(30,000×$220)+(0×$97)

(21,000×$220)+(21,000×$97)

Manufacturing margin (c=a-b) $1,800,000 $1,953,000

Less: Variable selling expense (d) $960,000 $1,260,000

(30,000×$32)+(0×$28)

(21,000×$32)+(21,000×$28)

Contribution margin (e=c-d) $840,000 $693,000

For East Coast:

Contribution margin ratio = (Contribution margin ÷ Sales revenue)×100

=($840,000÷ $8,400,000)×100

= 10%

For west coast:

Contribution margin ratio = (Contribution margin ÷ Sales revenue)×100

=($693,000 ÷ $8,610,000)×100

= 8.05%

4 0

3 years ago