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Pepsi [2]
3 years ago
15

Grannyâs Restaurant sells apple pies. Granny knows that the demand curve for her pies does not shift over time, but she wants to

learn more about that demand. She has tested the market for her pies by charging different prices. When she charges $4 per pie, she sells 30 pies per week. When she charges $5, she sells 24 pies per week. If she charges $4.50, she sells 27 apple pies per week.
a. Is the apple pie market perfectly competitive? Why or why not?

b. With this data, draw a graph of the linear demand curve for Grannyâs apple pies.

c. Find the price elasticity of demand at each of of the three prices.
Business
1 answer:
madam [21]3 years ago
7 0

Answer:

A. Apple Pie Market Not perfectly competitive

B. Demand Curve Equation : q = 8.84 - 0.16p

C. Price Elasticity of Demand : 0.8 , 1.25

Explanation:

A. The Apple pie market is not perfectly competitive because the perfectly competitive market has large no of buyers & sellers, the demand is perfectly inelastic (infinite demand at given constant prices). However in this market , apple pie demand (sales) are responding to price change , so its not perfectly competitive

B. Demand curve is the graphical representation of price, demand. The Demand curve function : q = a - bp ;  where q = quantity, p = price, a = autonomous demand , b = represents price demand relationship & is negative because of negative price demand relationship (Law of Demand).

Putting q & p given values : 4 = a - 30b ; 5 = a - 24 b. Solving these two equations for a & b , we get : a = 8.84 , b = 0.16 . So, the demand curve equation becomes : q = 8.84 - 0.16p  & plotting this equation , we get demand curve.

C. Price Elasticity of Demand is responsiveness of demand to price change. Formula : %change in demand/ %change in price =  ∆Q /∆P X P/Q

P    Q

4    30  (*)

5    24  (**)

4.5   27 (***)

Ped (*, **) =  ∆Q /∆P X P/Q =  (6 / 1) x (4/30) = 0.8

Ped (*, **) =  (3 / 0.5) x (4/30) = 0.8

Ped (**, ***) = (3 / 0.5) x (5/24) = 1.25

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Answer:

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Explanation:

Preparation of a production budget by quarters for the first 6 months of 2020.

Paige Company

Production Budget For the six months ended December 31, 2020

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2,706 2,706

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Total required units 13,806 15,006

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5 0
3 years ago
Bavarian Bar and Grill opened for business in November 2021. During its first two months of operation, the restaurant sold gift
lions [1.4K]

Answer:

A. Dr Cash 5,200

Cr Deferred revenue 5,200

Dr Cash 884

Dr Deferred revenue 1,300

Cr Sales revenue 2,100

Cr Sales taxes payable 84

B. $3,900

C. Sales tax liability - CURRENT $84

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Explanation:

A. Preparation of the appropriate journal entries (in summary form) for the gift certificates sold during 2011

Dr Cash 5,200

Cr Deferred revenue 5,200

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Dr Deferred revenue 1,300

Cr Sales revenue 2,100

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(4% × $2,100)

B. Calculation to Determine the liability for gift certificates to be reported on the December 31, 2018, balancesheet.

Liability for gift certificates=(5,200- 1,300)

Liability for gift certificates= $3,900

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C. Calculation for the appropriate amount for each classification (current or noncurrent) of the liabilities at December 31, 2018

Sales tax liability - CURRENT $84

(4% × $2,100=$84)

Sales tax liability - NON CURRENT $0

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Liability gift certificates – NON CURRENT $1,040

($5,200 × 20%=1,040 )

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Estimated current liability$ 4,160

($ 5,200 × 80%)

Less Gift certificates redeemed(1,300)

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8 0
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nika2105 [10]

Answer:

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Descriptive statistics helps to quickly describe large amounts of data because it simply involves using certain measurement tools to describe the data seen such that patterns emerge that will help in analyzing the data. Examples include, frequency tables and measures of variation like range and standard deviation.

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