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Licemer1 [7]
3 years ago
10

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.

c.

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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Maxim manufactures a hamster food product called Green Health. Maxim currently has 15,500 bags of Green Health on hand. The vari
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Answer:

b. $13,200.

Explanation:

Revenue from the sale of Green Health bags = Number of bags * Selling price

Revenue from the sale of Green Health bags = 15,500 bags * $10

Revenue from the sale of Green Health bags = $155,000

Revenue from Premium Green = Number of bags * Selling price

Revenue from Premium Green = 15,500 bags * $9

Revenue from Premium Green = $139,500

Revenue from Green Deluxe = Number of bags * Selling price

Revenue from Green Deluxe = 4,100 bags * $7

Revenue from Green Deluxe = $28,700

Incremental revenue = Revenue from Premium Green + Revenue from Green Deluxe - Revenue from Green Health\

Incremental revenue = $139,500 + $28,700 - $155,000

Incremental revenue = $13,200

So, the incremental revenue of processing Green Health further into Premium Green and Green Deluxe would be $13,200.

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2 years ago
Those who make economic policy concerning price controls often do so in order to?
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Answer:

establish a more equitable result based on normative judgements. In the market for personal computers and in the stock market: 1) supply and demand shifts change prices and quantities.

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2 years ago
The transactions of Spade Company appear below.
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Answer:

Entries are given

Explanation:

We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.

                                            DEBIT           CREDIT

A. Kacy Spade, owner, invested cash in the company

Common stock                   14250

Cash                                                           14250

B. The company purchased office supplies

Office supplies                      413

Cash                                                              413

C.The company purchased office equipment on credit

Office equipment                 7880

Payables                                                      7880

D.The company received $1,681 in cash

Cash                                       1681

Fees earned                                                 1681

E. The company paid $7,880 cash to settle the payable

Payables                                7880

Cash                                                              7880

F. The company billed a customer $3,021 as fees

Receivable                              3021

fees earned                                                   3021

G. The company paid $520 cash for the monthly rent.

Rental expense                        520

Cash                                                               520

H. The company collected $1,269 cash as partial payment

Cash                                         1269

Receivables                                                    1269

I. The company paid a $1,000 cash dividend to the owner

Retained earnings                  1000

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2 years ago
Pauline's Pecan Pies collected the following production information relating to November​'s baking​ operations:
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Answer:

Pecan Pies

Pauline

a. Summary of the flow of physical units:

Beginning Work in process = 209,000

Started during month =        1,025,000

less ending work in process  159,000

Units completed in month = 1,075,000

b. Computation of output in terms of equivalent units:

Units completed:

                                                       Physical      Direct      Conversion

                                                            Unit        Material        Cost

Determination of equivalent units:

less ending work in process  159,000    103,350 (65%)   127,200 (80%)

Units produced                     1,075,000   1,075,000 (100%)  1,075,000 (100%)

Explanation:

Data:

                                                         Physical      Direct      Conversion

                                                            Unit        Material        Cost

Beginning work in process            209,000

Ending work in process                  159,000      65%          80%

Units started during the month  1,025,000

Total units in production             1,234,000        103,350      127,200

Determination of equivalent units:

less ending work in process         159,000      103,350      127,200

Units produced                           1,075,000   1,075,000   1,075,000

a) The equivalent unit is the product of the class of unit in production multiplied by the percentage of completion.  This forms the basis for allocating cost between a product's costs and the ending work in process.  Calculating the equivalent units helps to determine accurate costs of units completed.                

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3 years ago
What is the major difference between a nonprofit organization and a for-profit organization?.
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Answer:

nonprofits have a social mission, while for-profits aim to offer products and services that are valuable and that make them a tom of money. Then they get money. and also non profits don't make a profit they just pay for themselves and their product.. 0 profit

Explanation:

4 0
2 years ago
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