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STatiana [176]
3 years ago
15

Assume that demand increases by 1 percent, the absolute value of price elasticity of demand is 1.0, and price elasticity of supp

ly is 1.0. What is the percentage price change in this case?
Business
1 answer:
qwelly [4]3 years ago
5 0

Answer:

0.5% increase

Explanation:

the price elasticity of demand (PED) = % change in quantity demanded / % change in price. It measures how the quantity demanded changes in response to a 1% increase in price.

The price elasticity of supply (PES) = % change in quantity supplied / % change in price. It measures how the quantity supplied changes in response to a 1% increase in price.

In this case the demand increases, which should result from a decrease in price, but in order to satisfy the demand, the supply must increase and to do so, it will increase only by 1 / (1 + 1) = 1/2 of the original change in quantity demanded = 0.5%

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Callaway Golf Co. leases telecommunication equipment from Photon Company. Assume the following data for equipment lease form Pho
inessss [21]

Answer:

This lease is  regarded and classified  as Capital lease.

Explanation:

This lease is  regarded and classified  as Capital lease.

Here, Callaway Golf Co. is the body financing the leased asset but the right ownership is with Photon Company.

Now; the present value of future payment is calculated as:

Present value of future payment =[PVA 6%,5 × Annual payment ]+[PVF 6%,5 × Residual value]

=[4.46511 × 31000] +[0.74726 × 15500]

= 138418.27+ 11582.53

= 150000

However the present value of minimum lease payment is equal or more than 90% fair market value ,as such we therefore conclude that this  lease is a capital lease.

3 0
3 years ago
You have $140,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expect
dedylja [7]

Answer:

Amount investment in Sock Y = - $126,000

Beta of portfolio = 1.636

Explanation:

Data provided in the question:

Total amount to be invested = $140,000

Stock                          X       Y

Expected return       14%     10%

Beta                          1.42     1.18

Expected return of portfolio = 17.6%

Now,

let the weight invested n stock X be W

therefore,

Weight of Stock Y = 1 - W

thus,

( W × 14% ) + (1 - w) × 10% = 17.6 %

or

14W + 10% - 10W = 17.6%

or

4W = 7.6

or

W = 1.9

Therefore,

weight of Y = 1 - 1.9 = -0.9

Thus,

Amount investment in Sock Y = Total amount to be invested × Weight

= 140,000 × ( - 0.9 )

= - $126,000 i.e short Y

Beta of portfolio = ∑ (Beta × Weight)

= [ 1.42 × 1.9 ] + [ 1.18 × (-0.9) ]

= 2.698 - 1.062

= 1.636

6 0
2 years ago
If you use credit what are you creating
Margaret [11]
<span>B is the correct answer. When you spend money on a credit card you are creating a debt because you are spending money you don't actually have at that point in time.</span>
3 0
3 years ago
Read 2 more answers
If we use Country A as the base country to calculate a cost-of-living index comparison to Country B and the index number is posi
arsen [322]

Answer:

Greater than

Explanation:

Answer 1:

If the index number used to calculate prices is positive, then it shows that price level in country B is greater than the price level in Country A which is used as the base year. Thus, the blank can be filled by Greater than.

 

PPP adjusted GDP in this case in country B will be less than its nominal GDP as price level is higher.

8 0
3 years ago
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Before entering a passing lane, be sure to check for good _____________________ to ensure that you will not lose control of your
zhannawk [14.2K]
 Before entering a passing lane, be sure to check for good  Road Traction <span>to ensure that you will not lose control of your vehicle during the passing maneuver. You can check a good traction by trying to hit the brake earlier in the road and see how fast it accelerates down.</span>
7 0
3 years ago
Read 2 more answers
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