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sineoko [7]
3 years ago
15

The Acmeville Metropolitan Bus Service currently charges $0.99 for an all-day ticket, and has an average of 588 riders a day. Th

e bus company is not earning a profit, but according to their contract with the city, they cannot cut the number of buses on the road. They must therefore find a way to increase revenues. The bus company is considering increasing the ticket price to $ 1.1 . The marketing department's studies indicate this price increase would reduce usage to 337 riders per day. Calculate the absolute value of the price elasticity of demand for bus tickets using the simple percentage change method. Round your answer to one decimal place.
Business
1 answer:
Westkost [7]3 years ago
7 0

Answer:

-3.88 or 3.88

Explanation:

Calculation to determine the absolute value of the price elasticity of demand

Using this formula

Price elasticity of Demand = % change in quantity demanded / % change in price

Price elasticity of Demand =%∆QD / %∆P

Let plug in the formula

Price elasticity of Demand= (( 337 - 588 )/( 1.1- 0.99)) * ( 0.99 / 588 )

Price elasticity of Demand= (-251 / 0.11) * ( 0.0017)

Price elasticity of Demand= -22,81.8181 * 0.0017

Price elasticity of Demand= -3.88 or 3.88 ( absolute value)

Therefore the absolute value of the price elasticity of demand will be -3.88 or 3.88

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3 years ago
You are creating a budget for your new buissness what should you include
slavikrds [6]

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6 0
3 years ago
Alpha associates was organized on january 1, year 1. Alpha was organized as a corporation. Alpha reported $200,000 of before tax
liq [111]

Explanation:

GIVEN DATA:

Alpha reported =  $200,000

withdrew = $30,000

corporate income tax rate = 30%

personal income tax rate = 15%

SOLUTION:

we get here total amount of tax collect as

total amount of tax collect = Alpha reported amount × personal income tax rate  ...............1

put here value

total amount of tax collect = $200,000 × 15%

total amount of tax collect = $30,000

here no corporate  tax required  and partner is taxed on share of total partnership income regardless of amount withdrawn

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3 0
2 years ago
Harrods PLC has a market value of £139 million and 5 million shares outstanding. Selfridge Department Store has a market value o
Eva8 [605]

Answer:

(a) The stock price of Harrods be after the acquisition is £ 31.45

(b) The exchange ratio between the two stocks would be 0.8550

Explanation:

Harrods PLC has a market value of £139 million and 5 million shares outstanding.

Selfridge Department Store has a market value of £41 million and 2 million shares outstanding.

a)  If Harrods offers 1.2 million shares of its stock in exchange for the 2 million shares of Selfridge

Shares outstanding = 5 + 1.2 = 6.2 million

Stock price = £ 195 million ÷ 6.2 million = £ 31.45

b)  alpha × 195 = 51

alpha = £51  million ÷ £195 million

= 26.15%

(195 ÷ ( 5 +X ) ) × X = 51

51 (5+X) = 195X

255 + 51X = 195X

144X = 255

X = 1.77 million shares

Exchange ratio would be: 1.77 ÷ 2

= 0.8550

4 0
3 years ago
1. In a pure competition market, producers should produce and sell where P=MC. Why? Why couldn’t they price their product above
Travka [436]
In a pure competition market, all products that being sold in that market is EXACTLY the same. None is worse and none is better.

In that condition, Buyers will make their decision based on price ( since all product's quality is possible)

That's why producers should sell where p=MC, which mean they should sell in the lowest price possible to be able to compete with other competitors
5 0
3 years ago
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