If a buyer has a critical or more important use of the product then the inelasticity of the demand increases, then it is the importance of the product affecting elasticity.
A product is considered inelastic if its demand remains static even if there is a significant price change. It is generally the basic necessity product that are considered as inelastic product. Inelastic demand of the product ensures the adequate supply of goods. In inelastic demand case the quantity demanded is same despite the change in price and the demand curve is graphed out as a vertical line. These goods have no substitutes ensuring the quantity demanded remains unaffected.
In case of fall in the price, the demand remains same, generating less revenue. On the other hand, if price hikes, the business earns significant profit.
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Many times junk bonds are a high risk bond, but are also a high return. They are more popular during a bear market for this reason only. Sine they have a high return it compensates for the high risk. The junk bonds can also help a persons personal portfolio. Junk bonds also issues with a 10 year term or less. A bear market is when there is a steady drop or stagnation in the market over a period of time.
Given:
<span>General pharmacy’s stock has a beta of 1.8 and an expected return of 14%,
Sicoras corp.’s stock has a beta of 1.5 and an expected return of 16.2%.
Let Rf stand for risk free rate.
Let Rm stand for expected market return.
General Pharmacy: 14% = Rf + 1.8(Rm-Rf)
Sicoras Corp.: 16.2% = Rf + 1.5(Rm-Rf)
0.14 = Rf + 1.8Rm - 1.8Rf
0.14 = Rf - 1.8Rf + 1.8Rm
0.14 = -0.8Rf + 1.8Rm
0.14 + 0.8Rf = 1.8Rm
Rm = 0.14/1.8 + 0.8Rf/1.8
Rm = 0.078 + 0.444Rf
</span><span>0.162 = Rf + 1.5(Rm-Rf)
</span>0.162 = Rf + 1.5[(0.078+0.444Rf) - Rf]
0.162 = Rf + 0.117 + 0.666Rf - 1.5Rf
0.162 - 0.117 = Rf + 0.666Rf - 1.5Rf
0.045 = 0.166Rf
0.045/0.166 = Rf
0.271 = Rf
<span>Rm = 0.078 + 0.444Rf
</span>Rm = 0.078 + 0.444(0.271)
Rm = 0.078 + 0.120
Rm = 0.198
Rf = 27.1% ; Rm = 19.8%
The risk free rate is 27.1% and the expected market return is 19.8%.
To check, simply substitute the value of Rf and Rm in the above equation.
Reducing credit card balances is the <span>action will help increase a low FICO score.
</span>The FICO mortgage score is between 300<span> and </span>850<span>. Higher scores indicate lower credit risk. Each individual actually has 65 credit scores for the FICO scoring model because each of </span>three<span> national credit bureaus, Equifax, Experian and TransUnion, has its own database.</span>
Answer:
For both 10,000 units and 20,000 units, the best alternative is Vendor B
Explanation:
Using the information provided in the question, we can write the following:
Annual Volume of 10,000 units
Internal Alternative 1
Variable costs = 170,000 (we multiply the variable cost per unit by total units)
Fixed costs = 20,000
Total costs = 370,000
Internal Alternative 2
Variable costs = 140,000
Fixed costs = 240,000
Total costs = 380,000
Vendor A
Total cost = 200,000 (we simply multiply the price by the quantity)
Vendor B
Total cost = 180,000
Vendor C
Total cost = 190,000
The cheapest option is Vendor B
Now for the 20,000 units:
Internal Alternative 1
Variable costs = 340,000
Fixed costs = 200,000
Total costs = 540,000
Internal Alternative 2
Variable costs = 280,000
Fixed costs = 240,000
Total costs = 520,000
Vendor A
Total cost = 400,000
Vendor B
Total cost = 360,000
Vendor C
Total cost = 380,000
Therefore, Vendor B is once again, the cheapest alternative.
