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Misha Larkins [42]
2 years ago
5

Prior to 2005, it seemed like house prices always rose and never fell. When the demand for housing increases, prices in the hous

ing market rise but not always by very much. For prices to rise substantially, the supply of housing must be relatively inelastic. That is, if the quantity supplied increases rapidly whenever house prices rise, price increases will remain small. Many have suggested government polices to increase the elasticity of supply. What specific policies might hold prices down when demand increases? Explain.
Business
1 answer:
omeli [17]2 years ago
6 0

Answer:

To hold home prices down, we need to increase elasticity of supply.An inelastic supply is one that cant change quickly to adapt to market changes. An elastic supply in housing means there are house to spare when market demand increases. In an attempt to create an elastic supply in housing, increase spare capacity can be worked on. Reduction in Tax rate for developers and shortening permit processes for building new homes would definitely create additional housing for purchase. To increase elasticity, we must supporting inventories of raw materials. The Lumber and concrete suppliers can be ensure to receive concessions to encourage them to supply additional raw materials.

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Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of $3,500 under each of the fol
Katena32 [7]

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a. The first payment is received at the end of the first year, and interest is compounded annually.

present value = annual payment x PVIFA

annual payment = $3,500

PVIFA, 12%, 5 periods = 3.6048

present value = $12,616.80

b. The first payment is received at the beginning of the first year, and interest is compounded annually.

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present value = $14,130.55

c. The first payment is received at the end of the first year, and interest is compounded quarterly.

present value = annual payment x PVIFA

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7 0
2 years ago
If the demand for a steak is unit price elastic, then; Select one: a. the percentage change in quantity demanded is equal to the
Anvisha [2.4K]

Answer:

The correct answer is option a.

Explanation:

The price elasticity of demand shows the responsiveness of quantity demanded to change in price. It is measured by the ratio of proportionate change in quantity demanded and proportionate change in price.

Unit price elastic means that the price elasticity of the good is 1. This implies that the percentage change in quantity demanded must be equal to the percentage change in price.

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3 years ago
1. The Herfindahl index: Suppose that three firms make up the entire bicycle manufacturing industry. One has a 40% market share,
alukav5142 [94]

Answer:

3400, Rise, C

Explanation:

1. Since there are just 3 firms and two already has a sum total of 70% (40+30), the third firm will have a market share of 30%

HHI= 40^{2}+ 30^{2}+30^{2}\\

HHI= 1600+900+900

HHI= 3400

2. Abe's Bikes with 30% leaves the market, if the two firms were to share Abe's market share equally (15+15), it will leave Firm A with 55% (40+15) and Firm B with (30+15) 45%

Therefore,

HHI= 55^{2}+45^{2}

HHI=3025+2025

HHI= 5050

A rise in HHI

3. C

An index of 10,000 corresponds to a monopoly firm with 100% market share.

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