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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%

You might be interested in
What is an incentive?
77julia77 [94]

Answer:

it acts as a stimulus to a market

Explanation:

an incentive is the extra money given to an employee for the constant hard work done,this can therefore act as a stimulus.

I hope this helps

8 0
2 years ago
CDB stock is currently priced at $82. The company will pay a dividend of $4.65 next year and investors require a return of 10.9
lidiya [134]

Answer:

g = 0.05229 or 5.229% rounded off to 5.23%

Explanation:

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D1 / (r - g)

Where,

  • D1 is dividend in year 1 or the next dividend
  • g is the growth rate
  • r is the required rate of return

Plugging in the available values for P0, D1 and r, we can calculate the value of g.

82 = 4.65  /  (0.109 - g)

82 * (0.109 - g) = 4.65

8.938 - 82g  =  4.65

8.938 - 4.65 = 82g

4.288 = 82g

g = 4.288 / 82

g = 0.05229 or 5.229% rounded off to 5.23%

8 0
3 years ago
The equipment necessary for a 4 year project will cost $3,300,000 and can be sold for $650,000 at the end of the project. The as
Allisa [31]

Answer: $618,096

Explanation:

Accumulated depreciation after 5 years = 20% + 32% + 19.2% + 11.52

= 82.72%

Value after 4 years = 3,300,000 * ( 1 - 82.72%)

= $570,240

Gain on sale = Salvage value - Net book value

= 650,000 - 570,240

= $79,760

Aftertax salvage value = 650,000 - (Gain on sale * tax)

= 650,000 - (79,760 * 40%)

= $618,096

6 0
3 years ago
The manager of a chain of fast-food restaurants has noticed that the number of breakfast customers has fallen by 50 percent in t
Darya [45]

Answer:

c. make an accurate diagnosis of what is causing the problem

Explanation:

The manager of the fast-food restaurant should understand the underlying problem first. Working on the assumption that it's because of a competitor marketing campaign may not give the desired results.  A customer's preference may change due to many reasons.

The manager should make an accurate diagnosis of the problem first. With a precise reason as to why customers as fleeing, then he can develop a counter-strategy. Retaining the current member of the crew will not reverse the situation. Reducing prices may affect profitability, which is not the desired result. With low prices, some customers may question the quality of the breakfast.

7 0
3 years ago
Who is Patrick Jorgenson? What does he do for a living?
Reika [66]

Answer:

I think you mean Patrick Jørgensen

Explanation:

He is a musical artist and if you don't mean Patrick Jørgensen I'm sorry

7 0
3 years ago
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