Initial price, P₀ = $1.25
Initial demand, Q₀ = 30 million
New price, P₁ = $1.75
New demand, Q₁ = 35 million
By definition, price elasticity is
η = (5/65)/(0.5/3)
= 0.4615
Answer: η = 0.46 (nearest hundredth)
This means that greater demand makes it possible to increase the price. Usually, this is not the case because lowering the price increases sales.
Answer:
In normal view, go to the slide deck.
Then, click and drag a slide thumbnail to a new position.
Or, in Slide Sorter View, drag and drop slides to a new location in the presentation.
Answer:
If a decrease in income increase the demand for a good , the good is an inferior good.
An inferior good is a good whose demand falls when income rises and rises when income falls.
Inferior goods have an indirect relationship with income
A normal good is a good whose demand rises when income increases and falls when income falls.
Normal goods have a direct relationship with income.
A substitute good is a good that can be used in place of another good. For example if good A and B are substitutes, if the price of good A increases, it would become more expensive for consumers and consumers would shift to consuming good B. As a result the demand for good B would rise and the quantity demanded of good A would fall.
Complements are goods that are used together. If the price of one of the goods increases, the demand for the other good falls and vice versa.
For example, gasoline and car are complements. If the price of cars fall, people would increase their demand for cars and as result the demand for gasoline would increase.
I hope my answer helps you
Explanation:
Answer:
The answer is: Yes
Explanation:
The money Alice paid in 1985 ($20,000) is considered a sunk cost.
A sunk cost is money already spent that cannot be recovered.
So if Alice decides to buy the land or not, she will not recover a cent from the $20,000 she paid before.
Since the current price of the land is $110,000 and Alice can purchase it for $100,000, then she should buy it. She is going to earn a $10,000 profit.
