The residual elasticity of demand facing a firm, is the portion of market demand which is not met or supplied by other firms in the market. In other words, this is the demand curve of the firm, given the presence of other firms in the market.

Given that

- all the firms in this market sell identical products,

- have identical marginal costs,

- and produce the same amount of output;

We model the residual elasticity of demand for this firm as:

EDr = EDm - EDa

Where:

EDr = the residual elasticity of demand for this firm

EDm = market elasticity of demand

EDa = total elasticity of demand facing ALL other firms in the market.

If EDa = 4, and a new firm enters the market, it will become 5

Elasticity of demand is the degree of responsiveness of demand, to change in price of a commodity.

7 0

3 years ago

A bond issue with a face amount of $1,200,000 bears interest at the rate of 9%. The current market rate of interest is 10%. Thes

katrin [286]

Answer: The selling price of the bond will be less than $1,200,000

Explanation:

From the question, we are informed that a bond issue with a face amount of $1,200,000 bears interest at the rate of 9% and that the current market rate of interest is 10%.

Since the market rate is 10% which is higher than coupon rate of 9%, this means that the market price for the bond will be smaller than the bond's face value.

Therefore, the selling price of the bond will be less than $1,200,000.

7 0

2 years ago

A product that represents a novel idea requiring little financial investment would be displayed in the ________ of the entrepren

Anit [1.1K]

Answer:

upper-left quadrant

Explanation:

A product that represents a novel idea requiring little financial investment would be displayed in the <u>upper-left quadrant</u> of the entrepreneurial strategy matrix.

A model of entrepreneurial venturing uses a four-cell matrix to identify proper business strategies. This matrix involves reducing risks and increasing innovation within a cell.

4 0

3 years ago