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Phantasy [73]
3 years ago
10

Problems and Applications Q8 Suppose subway ridership in New York City declined by 4.3 percent after a fare increase of 25 cents

to $1.50. Using the midpoint method, an estimate of the price elasticity of demand for subway rides is . True or False: According to your estimate, the Transit Authority's revenue rises when the fare increases. True False
Business
1 answer:
lana66690 [7]3 years ago
8 0

Answer:

Price elasticity of demand = Percentage in quantity demanded / Percentage change in price

We already have the percentage change in quantity demanded as -4.3%.

We need to find the percentage change in price using the midpoint method.

= (New price - Old price) ÷ ((New Price + Old price) / 2)

Old price = 1.50 - 0.25 = $1.25

Percentage change in price = (1.50 - 1.25) ÷ ((1.50 + 1.25) / 2)

= 18.18%

Price elasticity of demand = -4.3% / 18.18%

= -0.24

According to your estimate, the Transit Authority's revenue rises when the fare increases.<u> TRUE. </u>

The statement is true because the price elasticity of demand here is Inelastic and when this is the case, revenue rises when the price of the good or service increases.

The price elasticity of demand is inelastic when it is less than 1 which is the case here.

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erma4kov [3.2K]

Answer:

The correct option is;

Remain constant in total regardless of changes in activity

Explanation:

In the field of Economics, fixed costs are costs that remain the same or does not undergo change when the quantity of produced goods or rendered service increases or decreases. Fixed cost are not dependent on the fluctuations in the level of produced goods and/or service.

Fixed cost are cost that are charged based on the duration of use of the facility, such as the rent paid for the factory premises.

Therefore, we have; within the relevant range, fixed costs <u>remain constant in total regardless of changes in activity</u>

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Use your knowledge of the challenges new managers face to complete the following sentences.
DIA [1.3K]

Answer: The correct answer is MOST

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8 0
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In the long run, most economists agree that a permanent increase in government spending leads to <u>complete</u>.

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The British economist John Maynard Keynes' Keynesian economics, which postulated that changes in the amount of government spending and taxation have an impact on aggregate demand and the level of economic activity, serve as the foundation for fiscal policy.

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To learn more about Fiscal Policy here

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6 0
2 years ago
If stock you own is worth say 30,000 but you don't sell and notice it is going down but you hope it will go back up and keep it,
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Answer:

YES

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The situation given in the scenario is obviously that of capital erosion or capital loss.

Just like it would have been counted as capital gains if you had made a profit on the sale of the shares which would have been taxable, so also is it possible to make tax deductions on your returns when you make capital losses.

Hence, the loss amount can be deducted (offset) from other capital gains or ordinary income in your tax return.

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3 years ago
Incomes rise for low-income and high-income workers, but rise more for the high-income earners. How will this change affect inco
statuscvo [17]

Answer:

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