It is defined as the country's state on how it handles its activities such as money supply, resource allocation, and production and distribution of services to ensures human wants and needs have been met. Furthermore, the basic economic systems include traditional, mixed, market and command economy.
Answer:
About 250 ; 2000 bicycles
Explanation:
Opportunity cost simply means the loss incurred on a certain option when the alternative opruoonos chosen.
The opportunity cost of increasing shoe production from 10,000 to 20,000 pairs
The value of 20,000 (x axis) on the y axis is about 3750
Value of point A in the y - axis = 4000
Hence opportunity cost = (4000 - 3750) = 250 bicycles
B.)
The opportunity cost of increasing shoe production from 50,000 to 60,000 pairs
The value of 60,000 (x axis) on the y axis is about 0
Value of point B in the y - axis = 2000
Hence opportunity cost = (2000 - 0) = 2000 bicycles
Answer:
Option A Penetration Pricing Strategy
Explanation:
The lowest price set below the market price for a long term period is known as Penetration Pricing Strategy. The reason is that the penetration pricing strategy helps the company to make maximum profit by using the price demand relation. In this scenario the company is setting a price which is lowest price in the market and this price brings maximum number of sales and profits. This lowest price makes the competitor's prices unattractive.
The return on investment is 0.2%.
<h3>
What is the return on investment?</h3>
- Return on investment (ROI) or return on costs (ROC) is a ratio of net income to investment over time (costs resulting from an investment of some resources at a point in time).
- A high ROI indicates that the benefits of the investment outweigh the costs.
- ROI is used as a performance measure to evaluate the efficiency of an investment or to compare the efficiencies of various investments.
- It is one method of relating profits to capital invested in economic terms.
To find the return on investment:
- Return on investment:
- (6 - 4)/10 = 0.2%
Therefore, the return on investment is 0.2%.
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<u>Solution</u>: The correct answer is option D
<u>Explanation</u>:
The following formula is applied for calculating elasticity of demand:
![\mathrm{e}=\left[\left(\mathrm{Q}_{2}-\mathrm{Q}_{1}\right) /\left\{\left(\mathrm{Q}_{1}+\mathrm{Q}_{2}\right) / 2\right\}\right] /\left[\left(\mathrm{P}_{2}-\mathrm{P}_{1}\right) /\left\{\left(\mathrm{P}_{1}+\mathrm{P}_{2}\right) / 2\right\}\right]](https://tex.z-dn.net/?f=%5Cmathrm%7Be%7D%3D%5Cleft%5B%5Cleft%28%5Cmathrm%7BQ%7D_%7B2%7D-%5Cmathrm%7BQ%7D_%7B1%7D%5Cright%29%20%2F%5Cleft%5C%7B%5Cleft%28%5Cmathrm%7BQ%7D_%7B1%7D%2B%5Cmathrm%7BQ%7D_%7B2%7D%5Cright%29%20%2F%202%5Cright%5C%7D%5Cright%5D%20%2F%5Cleft%5B%5Cleft%28%5Cmathrm%7BP%7D_%7B2%7D-%5Cmathrm%7BP%7D_%7B1%7D%5Cright%29%20%2F%5Cleft%5C%7B%5Cleft%28%5Cmathrm%7BP%7D_%7B1%7D%2B%5Cmathrm%7BP%7D_%7B2%7D%5Cright%29%20%2F%202%5Cright%5C%7D%5Cright%5D)
Here, Q2 = 2 million
Q1 = 4 million
P2 = $3
P1 = $2
![\begin{array}{l}\mathrm{e}=[(2-4) /\{(4+2) / 2\}] /[(\$ 3-\$ 2) /\{(\$ 2+\$ 3) / 2\}] \\\mathrm{e}=[(-2) / 3] /[1 / 2.50]\end{array}](https://tex.z-dn.net/?f=%5Cbegin%7Barray%7D%7Bl%7D%5Cmathrm%7Be%7D%3D%5B%282-4%29%20%2F%5C%7B%284%2B2%29%20%2F%202%5C%7D%5D%20%2F%5B%28%5C%24%203-%5C%24%202%29%20%2F%5C%7B%28%5C%24%202%2B%5C%24%203%29%20%2F%202%5C%7D%5D%20%5C%5C%5Cmathrm%7Be%7D%3D%5B%28-2%29%20%2F%203%5D%20%2F%5B1%20%2F%202.50%5D%5Cend%7Barray%7D)
e = - 1.67
Thus, the absolute value is 1.67.
The ginger ale is price elastic because the absolute value is higher than 1. An increase in price will decrease its total revenue.
Thus, the following statement is true: (d) The demand for ginger ale is price elastic, so an increase in the price of ginger ale will decrease the total revenue of ginger ale producers.
