Answer:
The correct answer is letter "D": the quantity demanded of cereal will increase.
Explanation:
According to the demand theory, as long as the quantity demanded increases, the price would decrease (the demand curve shifts to the right). The quantity demanded decreases when the price would increase (the demand curve shifts to the left).
In the example, as eggs and cereals are substitute products, if a disease kills a large number of chickens there will be fewer eggs supply in the market. Consumers will start looking for substitutes. Then, <em>the quantity demanded for cereal will increase</em> moving the <em>demand </em><u><em>curve</em></u><em> to the right</em>.
Answer and Explanation:
a. The computation of price (expressed as a percentage of the face value) is shown below:-
Price = Face value ÷ (1 + Yield to maturity)^Number of the compounding period
= $1,000 ÷ (1 + 0.0323)^1
= $1,000 ÷ 1.0323
= $968.71
Price expected as a percentage to a face value = Price ÷ Face value × 100
= $968.71 ÷ $1,000 × 100
= 96.87%
b. The computation of credit spread of AAA-rated corporate bonds is shown below:-
Credit spread = Yield of AAA-rated corporate bond - Yield of treasury bond
= 3.23% - 3.15%
= 0.08%
c. The computation of credit spread on B-rated corporate bonds is shown below:-
Credit spread = Yield of B-rated corporate bond - Yeld of treasury bond
= 4.94% - 3.15%
= 1.79%
d. The credit rating for a bond changes with its respective credit risk change. That implies the bond 's rating would be lower the lower risk, and likewise.
The investor is demanding higher returns on risky bonds for additional risk-taking. Hence the credit spread is widening as the rating of bonds falls with an increase in the risk.
Answer:
See the explanation for the answers.
Explanation:
1. "Regulate it" is superior because anti trust makes it open to competition and the firm no longer remains a monopoly.
2. A regulated monopoly lower the price it charges from consumers which benefits the consumers because their consumer surplus increases. A regulated monopoly also offers better quality products.
3. Yes, there are redeeming qualities of monopolies.
Advantages of monopoly-
(a) The profits that the monopolist earns can be invested in R and D.
(b) Monopolies can practice price discrimination which can benefit weaker sections of the society.
(c) Monopolies can invest in latest technology which increases productivity and total output of a country.
(d) The government generates revenue from taxing the monopoly firm.
Answer:
$5,750
Explanation:
The computation of the balance in the allowance for doubtful accounts after bad debt expense is shown below:
= Account receivable × estimated percentage - credit balance of Allowance for doubtful accounts
= $295,000 × 0.03 - $3,100
= $8,850 - $3,100
= $5,750
By deducting the credit balance from the estimated amount we can find out the balance in the allowance for doubtful accounts
The answer is true. A value proposition is an innovation or service intended to make a company or product attractive to customers.
