It should be noted that when demand for a product is unit elastic and one would expect sales to equal: 5 units.
<h3>What is elastic demand?</h3>
An elastic demand can be regarded as the demand whereby change in quantity demanded due to a change in price is large.
An inelastic demand entails change in quantity demanded due to a change in price is small.
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It is a graph that shows the relationship between the quantity demanded of a commodity at different prices over a given period of time. It is observed that the demand curve slopes downward from left to right. It shows it has a negative slope which implies that consumers purchase more of commodity at lower prices than at higher prices.
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The required answer is production.
Production:
- Producing something is the act of creating something out of components or raw resources. To put it another way, production employs inputs to produce an output that is fit for consumption—a good or product that has value for a customer or end-user.
- One of the most crucial steps in the manufacturing process, production is fundamental to what it means to be a manufacturer. Without this activity, no finished goods would be produced, leaving no products for buyers to purchase.
- The purpose of production is to provide the economy with commodities and services. Land is the primary factor of production, but term also refers to any other natural resource that is used to create commodities and services. This includes everything that comes from the land, not just the land itself.
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The change in the amount sold will be greater when the price elasticity of demand is greater than 1. (option 3).
<h3>What is price elasticity of demand?
</h3>
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
Demand is elastic when the coefficient of demand is greater than one. This means that for a small change in price, the quantity demanded would be greater.
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Answer:
450 million is the firm’s value of equity
Explanation:
In this question, we are asked to calculate the best estimate for the firm’s value of equity in millions.
To calculate this, we proceed as follows;
Mathematically;
Firm’s value of equity= [(Total corporate Value - (Notes payable + Long term debt)]
From the question, we identify the total corporate value as 750 million, the notes payable as 100 million and a long term debt of 200 million
Now, plugging these into the equation above, we have ;
Firm’s value of equity = 750 million - (100 million + 200 million) = 750 million - 300 million = 450 million