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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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Select the correct answer.

Daniel [21]

Answer:

Which element can be used as a hook in an essay?

The element that is used as a hook in an essay is called main idea

Explanation:

Main idea is used as an hook in writing essay because it gives the reader an idea of the message being passed by the writer.

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3 years ago

Explain five (5) contributions of the manufacturing industry to industrialization

Drupady [299]

Answer:

Line production system

Scale of production

Development of Factories

Development of Capital Machinery

Development of Capital Goods Industry.

Explanation:

Line production system: This system was adopted in manufacturing companies to divide the tasks between the workers so a product can be manufactured in the fastest way possible

Scale of production: The manufacturing industry develop high levels of production that allow surpluses of production of goods in the economy.

Development of Factories: The manufacturing industry was the first in organize the Plant for production purposes. Therefore, the creation of what is nowadays known as factories was a consequence of this organization.

Development of Capital Machinery: Manufacturers Researched and developed new machines to improve the times of production. With time this technology was used for more industries to achieve fast performances.

Development of Capital Goods Industry: As machines were developed the industry of Capital goods arose and became an important source of technology for companies.

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3 years ago

During 2018 Marquis Company was encountering financial difficulties and seemed likely to default on a $300,000, 10%, four-year n

Olenka [21]

Answer:

The answer is: C) $80,000

Explanation:

Marquis Company should recognize gains from both a reduction in the debt's principal and its interest.

The debt principal was $300,000 and the interests were $30,000 (10% of the principal), their total amount was $330,000. If the bank accepted $250,000 as total settlement for the debt, then the difference between the total debt and the settling payment is considered gain: $330,000 - $250,000 = $80,000

4 0

2 years ago

A company produces fruit juice in five different flavors (Mango,Guava,Apple,Grape and Tropical). A local supermarket sells the p

djverab [1.8K]

Answer:

3 ÷ 5

Explanation:

Data provided in the question according to the question is as follows

There are five different flavors like Mango, Guava, Apple, Grape, and Tropical = 5

And, the three flavors i.e Guava, apple and the Grape = 3

So, the probability of the above three flavors is three flavors and the five flavors relation i.e shown below

= 3 ÷ 5

Hence, the answer is 3 ÷ 5

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2 years ago

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The va

bonufazy [111]

Answer:

b. $34,000.

Explanation:

The computation of contribution margin is shown below:-

Particulars Bales Tales Wales

Seeling price $55 $78 $32

Variable cost $20 $50 $15

Contribution

margin $35 $28 $17

Required hour to

process 5 7 1

Contribution margin

per hour 7 4 17

Maximum contribution margin is

= Contribution margin per hour × number of machine hours

= 17 × 2,000

= $34,000

8 0

2 years ago