Supply price elasticity measures sellers' sensitivity to changes in price. When price changes have a large impact on supply, we say that supply is price elastic, with small price increases supply will increase considerably. We say that an offer is perfectly elastic when from a certain price level, suppliers have bid as much as possible. In the short term, however, firms bump into structural factors to deliberately increase their supply. For example, a factory has a short-run maximum production limitation. In the short term, the factory may grow its plant and buy more machines, but in the short term from one point the supply is more rigid.
There are, however, some exceptions. In the case of natural monopolies, such as water supply, the increase in price may increase supply indefinitely. This is a case where, in the short run, price elastic supply can be infinitely elastic. Thus, rising prices can increase the amount of water supplied as much as demanded by consumers. This is because the marginal cost of supplying more water is low for the firm.
Note: marginal cost is the cost of manufacturing one more unit of the product supplied. In the case of water, the marginal cost of providing 1 unit of water measurement is very low.
Answer:
The answer is: setting product prices high enough for the company to be profitable.
Explanation:
Production cost refers to the <u>cost that a company has incurred from the moment it manufactured its product, towards the delivery until it provided the product or service to the customers. </u>Part of this cost are the taxes that are imposed on the product or service.
So, in order to control costs, the production cost report is being used by managers in order to set product prices high enough for the company to be profitable.
or example, if the production cost is higher than the sale price of a product, then the company could either l<u>ower their production cost or set their product prices high enough in order to be profitable.</u> If they cannot do both, then they could stop producing the product or service.
<span>Domestic products are generally cheaper due to lower shipping cost and few to no additional tariffs are levied on those goods. A side note: Since 2002 in the EU 'Feta' has had a protected designated origin; meaning that only cheese produced in a particular way from particular regions of Greece can be labeled for sale as 'feta.'</span>
A. The market value of the equity if the asset is 7100 is
7100 - 5800 = 1300
b. The market value of the equity if the asset is 5200 is
5200 - 5800 = -600
A negative equity means that the company is in debt.<span />
Answer:
71.64
Explanation:
For computing the current price, first, we have to compute the dividend for next five years which are shown below:
In year 1 = ($6 + $5) = $11
In year 2 = ($11 + $5) = $16
In year 3 = ($16 + $5) = $21
In year 4 = ($21 + $5) = $26
In year 5 = ($26 + $5) = $31
Now the current price equal to
= Year 1 dividend ÷ (1+ rate) ^ 1 + Year 2 dividend ÷ (1+ rate) ^ 2 + Year 3 dividend ÷ (1+ rate) ^ 3 + Year 4 dividend ÷ (1+ rate) ^ 4 + Year 5 dividend ÷ (1+ rate) ^ 5
= 11 ÷ 1.12 ^ 1 + 16 ÷ 1.12 ^ 2 + 21 ÷ 1.12 ^ 3 + 26 ÷ 1.12 ^ 4 + 31 ÷ 1.12 ^ 5
= $9.82 + $12.76 + $14.95 + $16.52 + $17.59
= $71.64
