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gizmo_the_mogwai [7]
2 years ago
6

The wrist watch industry in a country is not very competitive. There are limited brands available and the existing firms use the

ir market power to keep prices high.​ Envy, one of the leading brands in the​ market, is planning to increase the price from​ $1,000 to​ $1,100 per watch. The firm is expecting the quantity demanded to fall by only 7 percent.​ However, after the price is increased to​ $1,100, quantity demanded actually declined by 12 percent.​ Sonia, a student of​ economics, knows that the average income level in this country has increased over the last year. When actual sales of Envy watches turn out to be lower than​ anticipated, she concludes that the income elasticity of demand for Envy watches is negative. Her conclusion is flawed because
Business
1 answer:
olchik [2.2K]2 years ago
5 0

Answer:

B. she is confusing between price elasticity of demand and income elasticity of demand.

Explanation:

Income elasticity of demand measures the change of quantities demanded for a particular good to a change in its income.

It is therefore calculated as the ratio of the percentage change in quantity demanded to the percentage change in income.

Price elasticity of demand is a measure of the change in the quantity demanded or purchased of a product in relation to its price change.

Mathematically:

Price Elasticity of Demand = % Change in Quantity Demand / % Change in Price.

From the above definitions stated about income and price elasticity of demand, the income in that year increased but the quantity of goods demanded decreased further by 5% from the predicted 7% (12 %)

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Jaleel is the marketing manager for a moderately well-known rock band. He wants to know more about industry trends including sal
BlackZzzverrR [31]

Answer:

Syndicated Data

Explanation:

Syndicated is a general data which does not represents a single entity, it includes a vast number of entities data that is aggregated to analyze how much value the company can drive from this aggregate amount. So the data that helps in analyzing the environment in general to plan the future move of organization is known as Syndicated Data. The manager is collecting aggregate data that comes from a wide number of bands, including industry sales by musical styles, online views, etc. is a syndicated data.

4 0
3 years ago
Assume the bid rate of an Australian dollar is $0.60 while the ask rate is $0.61 at Bank Q. Assume the bid rate of an Australian
jarptica [38.1K]

Answer:

$16,393.44

Explanation:

Calculation for what would be your gain

Gain=$1,000,000/($0.61 per AUD)*$0.62 per AUD - $1,000,000

Gain=1,639,344*$0.62 per AUD - $1,000,000

Gain=$16,393.44

Therefore what would be your gain if you use $1,000,000 and execute locational arbitrage will be $16,393.44

3 0
3 years ago
Tamara is a Managerial Accountant at Everything New. Everything New manufactures furniture. Tamara purchased leather to be used
Murrr4er [49]

Answer:

B. Raw Materials

Explanation:

Raw materials are the basic components of manufacturing and production process in a goods manufacturing entity.  Raw Materials  are used in the production of a finished products (such as Crude Oil is a raw material for Petrol, Milk is a raw material for Yogurt, Yarn is a raw material for Garment whereas  Petrol, Yogurt and Garment are the finished products).

Keeping in view the above discussion, the leather purchased by the Tamara, to be used on some of the furniture to be manufactured by the Everything New, shall be classified as Raw Materials.

Answer is B. Raw Materials

4 0
3 years ago
Suppose that Dunkin Donuts reduces the price of its regular coffee from $2 to $1 per cup, and as a result, the quantity sold per
harkovskaia [24]

Answer:price elasticity of demand for Dunkin Donuts’ regular coffee is 1.8

Explanation: Using the midpoint formnulae

Price elasticity of Demand =percentage change in quantity demanded/ Percentage change in price.

Percentage change in quantity = new quantity  - old quantity  / (new quantity + old quantity)/2  x 100

= 40-10/(40+10)/ 2 = 30 /25 = 1.2 x 100 =120%

Percentage change in price  = new price   - old price   / new price + old price)/2   x 100

= 1- 2 / (1+2)/2= -1/1.5x 100 = -66.67 %

Price elasticity of Demand =percentage change in quantity demanded/ Percentage change in price.

= 120%/-66.67%= -1.79 = -1.8

For Price elasticity of demand, the sign is not included and the basis for elasticity is on the value itself . here we can conclude that the Price elasticity of demand for Dunkin donut is 1.8 and elastic because a fall in price led to an increase in amount being sold.

3 0
3 years ago
The manager of the bank where you work tells you that the bank has $300 million in deposits and $255 million dollars in loans. I
tigry1 [53]

Answer:

The bank is holding $19.5 million in excess reserves.

Explanation:

If the bank has $300 million is deposits and the reserve ratio is 8.5% then the bank needs to have minimum reserves of 8.5% of 300 million so the minimum reserves are 0.085*300 million = 25.5 million

How ever the actual reserves of the bank is the difference between deposits and loans. The deposits are 300 million and loans are 255 million so the actual reserves are 300 million-255 million= $45 million

Excess reserves is the difference between the actual reserves and the minimum reserves so 45 million - 25.5 million = 19.5 million.

4 0
3 years ago
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