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3 years ago

A movie theater company obtains the following estimated elasticity of demand.

Business

1 answer:

Anarel [89]3 years ago

4 0

Answer:

Explanation:

Given:

Short-run price elasticity = - 0.85

Long-run price elasticity = - 3.2

Cross-price elasticity = - 0.26

Income elasticity = 0.75

a. If the theater raises movie ticket prices by 10 percent it means that percentage of price change is 10%.

$Elasticity = \frac{Percentage change in Quantity demanded}{Percentage change in price} \\\\-0.85 = \frac{Percent change in Quantity demanded\\}{10} \\\\Percent change in Quantity demanded = -0.85*10\\ \\ = -8.5$

Thus, quantity demanded falls by 8.5 percent.

b. Short-run price elasticity is different from long-run elasticity due to the time horizon. When individuals have more time they can switch to cheaper alternatives. While, it takes time to adjust in the short-run as the time horizon is not much. So short-run elasticity is less elastic than in the long-run.

In the long-run demand for movie tickets is very elastic. So as price rises in the long-run, quantity demanded falls by a greater proportion. This will cause total revenue to fall in the long-run.

d. Normal goods are goods which have a positive income elasticity. This means for normal goods demand increases as income increases. But in case of inferior goods, demand is inversely related to income. As income rises demand for inferior goods decreases.

Since in this case, income elasticity is 0.75 (positive) it can be concluded that movie tickets are normal goods.

e. Good X is the related good to movie tickets. As cross price elasticity is -0.26 it means that as price of movie tickets rises by 1 percent demand for good X will fall by 0.26 percent.

Thus, as demand for good X and price of movie tickets are inversely related to each other it can be said that they are complementary goods.

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Described below are certain transactions of Pina Corporation. The company uses the periodic inventory system. 1. On February 2,

nadya68 [22]

Answer:

Question: From the details given, make all the journal entries necessary to record the transactions above using appropriate dates.

Pina Corporation

Journal Entries

Date Details Debit Credit

$ $

February 2 Purchases 62,034

Accounts Payable 62,034

Being credit purchase of goods at discount of 2%

February 26 Accounts Payable 62,034

Purchase - Discount 1,266

Cash 63,300

Being payment made for goods purchased

April 1 Vehicle 52,000

Cash 3,000

10% 1-year Note payable 49,000

Being purchase of vehicle by part cash, part note-payable

May 1 Cash 82,900

Note Payable - Discount 9,600

1-year Note payable 92,500

Being borrowing from bank

August 1 Dividend 280,000

Dividend Payable 280,000

Being dividend declared, not yet paid

September 10 Dividend Payable 280,000

Cash 280,000

Being cash payment of dividend

Explanation:

a) 2/10, n/30 means that the buyer is to pay within 30 days but is entitled to 2% discount if the purchase is paid for in 10 days. Since Pina records at net amounts after cash discount

To record this purchase = 63,300 * 0.02 = 1,266

= 63,300 - 1266 = $62,034

b) Since payment was made on 26th, it means the 10 day discount was not utilized hence Pina pays full price for the goods

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3 years ago

Which of the following can result from inflation in the United States?

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Answer:

b. Investors buy products in other countries.

Explanation:

Inflation causes higher cost of production for manufacturer which then charge high cost for the products. Thus, if there is inflation in US, product cost will skyrocket thus companies will buy products from other countries where the product might be at a cheaper cost.

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2 years ago

Hyper-Tech Enterprises manufactures mechanical parts used in air conditioning and heating units.The company employs over 300 wor

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D) The process outlined at Hyper-Tech for filing employee grievances differs from the grievance procedures at other firms in the same industry

<h3>Hyper-Tech </h3>

It was founded in 2008. The company's line of business includes providing various business services.

In conclusion, we can conclude that the correct answer is as given above.

learn more about Hyper-Tech from here: brainly.com/question/14343056

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2 years ago

Rosewood Company made a loan of $16,000 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rat

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Answer:

The correct answer is $720 in Year 1 and $240 in Year 2 Next.

Explanation:

According to the scenario, the given data are as follows:

Loan Amount =$16,000

Rate of interest = 6%

Time period for first year (Apr - Dec) = 9 months

Time period for second year ( Jan - Mar) = 3 months

So, we can calculate the amount of interest by using following formula:

For first year:

Amount of interest (1st year) = $16,000 × 6% × 9 ÷ 12 = $720

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Kab works hand-in-hand with the usda people's garden initiative, which:

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