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BARSIC [14]
3 years ago
8

True or False: The Law of One Price states that in competitive markets free of transportation costs and barriers to trade (such

as tariffs), identical products sold in different countries must sell for the same price when their price is expressed in the same currency.
Business
2 answers:
Assoli18 [71]3 years ago
6 0

Answer:

The Law of One Price stated in the question above is <u>TRUE</u>

Explanation:

The law of one price is an economic concept that states that the price of an identical asset or commodity will have the same price globally, regardless of location, when certain factors are considered.

The law of one price takes into account a friction less market, where there are no transaction costs, transportation costs, or legal restrictions, the currency exchange rates are the same, and that there is no price manipulation by buyers or sellers.

This law exists because differences between asset prices in different locations would eventually be eliminated due to the arbitrage opportunity.

These are the maxims upon which the law of one price is founded

  • The law of one price states that in the absence of friction between global markets, the price for any asset will be the same.  
  • The law of one price is achieved by eliminating price differences through arbitrage opportunities between markets.
  • Market equilibrium forces would eventually converge the price of the asset.

sukhopar [10]3 years ago
4 0

Answer:

It is False

The law of one price (LOOP) states that in the absence of trade frictions (such as transport costs and tariffs), and under conditions of free competition and price flexibility (where no individual sellers or buyers have power to manipulate prices and prices can freely adjust), identical goods sold in different.

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Calculate the net debt of the company based on the information below:
galina1969 [7]

Answer:

$28,300

Explanation:

Calculation to determine the net debt

Using this formula

Net debt=(Short-term interest bearing debt +

Long-term interest bearing debt+Non-interest bearing liabilities)-Cash and equivalents

Let plug in the formula

Net debt=($ 3,000 +$25,000+$ 1,500)-$ 1,200

Net debt=$29,500-$1,200

Net debt=$28,300

Therefore Net debt is $28,300

6 0
3 years ago
Consider luxury weekend hotel packages in Las Vegas. When the price is $250, the quantity demanded is 2,000packages per week. Wh
konstantin123 [22]

Answer:

The elasticity is about 1.43, and an increase in the price will cause hotels' total revenue to decrease

Explanation:

The formula of the midpoint for the variation of the quantity is  \frac{Q2-Q1}{(Q2+Q1)/2} *100 and for the price is \frac{P2-P1}{(P2+P1)/2} *100. With the variation of the price and the quantity the elasticity formula is ΔQ/ΔP. Replacing the elasticity is -1.43

The price elasticity of the demand is bigger than 1, that means that the demand is elastic, every increase of the price will cause a bigger decrease of the quantity, the revenue will drop because the increase of the price do not compansete the decrease of the quantity.

6 0
3 years ago
Ju Li believes that her sales force should sell in a conventional sense by identifying prospective clients, such as the Coffee C
Lady_Fox [76]

Answer:

C. order getter

Explanation:

Based on the information provided within the question it can be said that this type of salesperson is referred to as an order getter. This is the person focuses on identifying potential customers, giving them information about a product/service, and persuades them into buying what he/she is offering in order to close a sale and gain a loyal customer. Which is exactly what Ju Li believes in doing.

7 0
3 years ago
For the past year, Momsen, Ltd., had sales of $46,382, interest expense of $3,854, cost of goods sold of $16,659, selling and ad
Ivenika [448]

Answer:

Net income= $11,412.2

Explanation:

Giving the following information:

sales of $46,382

interest expense of $3,854

cost of goods sold of $16,659

selling and administrative expense of $11,766

depreciation of $6,415

t=0.35

We need to use the following formula:

Net income= (sales - COGS - selling and administrative expense - interest expense - depreciation) - tax + depreciation

First, we deduct Depreciation to decrease the tax base, but because it is not an actual payment, we have to sum it after tax.

Sales= 46,382

COGS= (16,659)

Gross profit= 29,723

Selling and administrative expense= (11,766)

Interest=(3,854)

Depreciation= (6,415)

EBT= 7,688

Tax= (7,688*0.35)= (2,690.8)

Depreciation= 6,415

Net income= $11,412.2

6 0
3 years ago
Dove and Eagle formed a business entity in which they are equal owners. Dove contributed cash of $100,000, and Eagle contributed
nlexa [21]

Answer:

S corporation

Explanation:

In the given case, The eagle basis at the closing of the year is 70,000 i.e. $40,000 + $30,000 (50% of $60,000)

In the case when the entity was a general partnership so 50% of $10,000 i.e. $5,000 would be added to the basis of Eagle

So here the type of entity that was formed is S corporation

The same is relevant

4 0
2 years ago
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