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Nataliya [291]
3 years ago
10

In which instance will total revenues decline? Multiple Choice price increases and Ed equals -.41 price increases and demand is

unit-elastic price decreases and demand is elastic price increases and Ed equals -2.47
Business
1 answer:
liraira [26]3 years ago
8 0

Answer:

price increases and Ed equals -2.47

Explanation:

Elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Demand is inelastic if a change in price has little or no effect on quantity demanded. The absolute value of the coefficient for inelastic demand is less than 1.

If price increases and demand is inelastic, total revenue would increase because there would-be little or no change in quantity demanded as a result of the price increase.

Demand is elastic if a small change in price has a greater effect on the quantity demanded.

The absolute value of the coefficient for elastic demand is greater than 1.

If demand is elastic and price is increased, revenue would fall because of the decease in quantity demanded.

If demand is elastic and price is deceased, revenue would rise because of the increase in Quanitity demanded as a result of the fall in price.

Demand is unit elastic if a change in price has the same proportional effect on quantity demanded. The absolute value of the coefficient for unit elastic demand is one.

I hope my answer helps you

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Suppose the price elasticity of demand for oranges is 0.8. if a fall frost destroys one-third of the nation's orange crop, how w
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3 years ago
What factor is NOT included in determining the total cost of a loan?
atroni [7]
Out of those four it would have to be D) down payment
8 0
3 years ago
A 3-year interest rate swap has a level notional amount of $300,000. Each settlement period is one year and the variable rate is
tankabanditka [31]

Answer:

(a)0.04317 (b) 3672 which will be paid by the payer to the receiver (c) -399. so, the 399 which will be paid by the receiver to the payer (d) 2659.38

Explanation:

Solution

(a) Swap Rate (R) = (1 - P₃)/(P₁+P₂+P₃)

= (1 – 0.88)/(0.97 + 0.93 + 0.88)

= 0.04317

(b) The payer pays the fixed interest rate and gets the variable interest rate.

Then, the fixed interest rate is known as the  swap rate which is 4.317%.

Now,

The variable rate is the one year spot rate for the first year of the loan. which is r₁ = 1/P₁ -1 = 1/0.97 - 1 = 0.03093

Thus,

The net swap payment becomes (300,000)(0.04317) - (300,000)(0.03093) = 3672 which will be paid by the payer to the receiver.

(c) The payer pays the fixed interest rate and receives the variable interest rate. The fixed interest rate is the swap rate which is 4.317%.

Thus,

The variable rate is the one year spot rate for the second year of the loan is 4.45%.

So,

The net swap payment becomes (300,000)(0.04317) - (300,000)(0.04450) = -399.

Therefore, the 399 which will be paid by the receiver to the payer.

(d) The market value is the present value of expected future cash flows. under this swap, the variable rate has been swapped for the constant swap rate. There is one year left under the swap.

Then,

The expectation is that the swap owner will pay (300,000)(0.04317) and receive (300,000)(0.0525). these payments would be made at the end of one year. Therefore, the market value will be:

{(300,000)(0.0525) - (300,000)(0.04317)}/1.0525 = 2799/1.0525 = 2659.38

4 0
3 years ago
For Pronghorn Corporation, year-end plan assets were $2,035,000. At the beginning of the year, plan assets were $1,770,000. Duri
Anni [7]

Answer:

The answer is: $367,000

Explanation:

To determine Pronghorn Corporation's actual return on plan assets we can use the following formula:

return on plan assets = (year-end plan assets - beginning of the year plan assets) - (contribution to the pension fund - benefits paid)

return on plan assets = ($2,035,000 - $1,770,000) - ($116,000 - $218,000)

return on plan assets = $265,000 - (-$102,000) = $265,000 + $102,000

return on plan assets = $367,000

6 0
3 years ago
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