An investor bought a one-acre lot on the outskirts of a city for $12,700 cash. Each year she paid $175 of property taxes. At the
1 answer:
Answer:
79.5%.
Explanation:
Rate of return = x 100
The cost of the acre = $12700.
Total property taxes paid for 7 years = $175 x 7
= $1225
Net value of cost = $12700 + $1225
= $13925
Net value of the land when sold = $25000
∴ Rate of return = x 100
= 0.7953 x 100
= 79.53%
The rate of return of the acre of land is 79.5%.
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An increase in the production leads to decline in the price. Producers are likely to supply more at the lower price or the existing price, considering the increase in production. If there is a 20 percent increase in the production, then it tends to increase the supply. An increase in supply will have a negative impact on price.
The effect of the increase in production on price is shown in the above figure. A twenty percent increase in the production causes an increase in the supply. Excessive supply causes a reduction in the price. Hence, when the supply increases from P1 to Q2, the price decreases to P2 from P1.
