The short-run price elasticity of demand will be inelastic and the short-run price elasticity of supply will be inelastic.
Elasticity of demand measures the relationship that exists between price and quantity demanded.
Elasticity of supply measures how quantity supplied changes when there is a change in the price of a good.
<u><em>Types of elasticity.</em></u>
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Elastic demand (supply): This means that demand (supply) is sensitive to price changes
- Inelastic demand (supply): this means that demand (supply) does not respond to price changes. The coefficient of elasticity is less than one.
- Unit elastic demand (supply): demand (supply) changes in equal proportion. The coefficient of elasticity is equal to one.
<em><u>Factors that affect elasticity </u></em>
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The number of substitutes the good has: the more substitutes the good has, the more elastic demand is.
- The length of time: demand (supply) is inelastic in the short run. In the short run, producers (consumers) do not have enough time to find suitable substitutes. In the long run, producers would have more time to search for suitable substitutes or shift to the production of other goods when compared with the short-run.
- Ease of entry or exit into an industry: the more easy it is for firms to enter into an industry, the more elastic supply would be.
To learn more about elasticity of demand, please check:
Answer:
The correct answer is $112,000.
Explanation:
According to the scenario, the given data are as follows:
Home insured = $160,000
Cost to rebuild = $180,000
Personal property coverage = 70%
So, we can calculate the amount of coverage by using following formula:
Amount of coverage = Home insured × Personal property coverage
By putting the value, we get
Amount of coverage = $160,000 × 70%
= $112,000
Answer:
Reward to risk ratio = (Expected return - Risk free rate) / Beta
Reward to risk ratio of Y = ( 0.145 - 0.056) / 1.2
Reward to risk ratio of Y = 0.089 / 1.2
Reward to risk ratio of Y = 0.0741666
Reward to risk ratio of Y = 7.42%
Reward to risk ratio of Z = (0.093 - 0.056) / 0.7
Reward to risk ratio of Z = 0.037 / 0.7
Reward to risk ratio of Z = 0.0528571
Reward to risk ratio of Z = 5.29%
Security market line (SML) reward-to-risk ratio is the market risk premium itself which is 6.6%.
Stock Y has a reward-to-risk ratio that is higher than the market risk premium, it is currently under-valued in the market. Similarly, since stock Z has a reward-to-risk ratio that is lower than the market risk premium, it is currently over-valued in the market.
Option E, the A-E-I-O-U Model is expressed as "We should express our concerns about the conflict and suggest a solution"
<u>Explanation:
</u>
The Design of Conflict Management A-E-I-O-U, The "A-E-I-O-U" approach is used to address a range of standoffs: worker-to-boss, peer-to-peer, co-founder to co-founder, and stood for recognition, expression, identification, results, and understanding. It helps customers to be conscious of confrontations.
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A - Acknowledge: Assume that the other person is right and will resolve the dispute.
- E - Express: Acknowledge your beneficial intention and convey your own particular concern.
- I - Identify: Recognize what you want to do.
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O - Outcome: People react much more favourably because they can purchase into why their acts or behaviours change.
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U - Understanding: Mutual understanding is attained
Answer:
a) I used an excel spreadsheet since there is not enough room here.
b) $69,000
c) $14,500
d) $14,000
f) $57,800
g) $59,500
