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3 years ago

Explain why supply and price are positively related

Business

1 answer:

pishuonlain [190]3 years ago

6 0

Answer:

see below

Explanation:

A positive correlation signifies that an increase in one variable results in the other variable moving in the same direction. Because supply and price are positively correlated, a price increase will increases supply. The opposite is also true.

Suppliers are business people whose main objective is to make profits. Higher prices give higher margins. Suppliers make higher profits when prices are high. The possibility of making higher profits motivates suppliers to increase supplies to the market. On the other hand, low prices may result in losses. When prices are low, supplies will shy away from the market to avoid making losses.

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A stock has an expected return of 11.85 percent, its beta is 1.24, and the expected return on the market is 10.2 percent. What m

prisoha [69]

Answer:

The risk free rate is 3.325%

Explanation:

The required rate of return or cost of equity of a stock can be calculated using the CAPM. The CAPM estimates the required rate of return of a stock based on three factors- risk free rate, stock's beta and the market risk premium. The equation of required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate
rM is the return on market
(rM - rRF) gives us the risk premium of market

We already have the values for r, Beta and rM. Plugging in these values in the formula, we calculate the rRF to be,

Let rRF be x.

0.1185 = x + 1.24 * (0.102 - x)

0.1185 = x + 0.12648 - 1.24x

1.24x - x = 0.12648 - 0.1185

0.24x = 0.00798

x = 0.00798/0.24

x = 0.03325 or 3.325%

3 0

3 years ago

If the elasticity for computers at the current price is at 6.4, what would happen to total revenues if a computer manufacturer d

MA_775_DIABLO [31]

They would go down drastically fast.

5 0

3 years ago

Read 2 more answers

Two types of cars (Deluxe and Limited) were produced by a car manufacturer last year. Quantities sold, price per unit, and labor

frez [133]

Answer and Explanation:

Labor Productivity in Units per hour

Labor Hours Productivity(In units) = Total Output / Input hours

For Deluxe Cars = 5,000 units / 21,250 hours = 0.24 units per hour (approx)

For Limited Cars = 6,250 units / 29,950 hours = 0.21 units per hour (approx)

Labor Productivity in dollars

Labor Hours Productivity(In dollars) = Total Output in dollar / (Input hours x rates)

For Deluxe Cars = (5,000 units x $8,500) / (21,250 hours x $13) = $42,500,000 / $276,250 = $153.84 per unit

For Limited Cars = (6,250 units x $10,100) / (29,950 hours x $15) = $63,125,000 / $499,250 = $126.44 per unit

7 0

3 years ago

The principal offensive strategy options include all of the following EXCEPT:A.using a cost advantage to attack competitors on t

Len [333]

Answer:

All are options for offensive strategy

Explanation:

In this question, we are trying to select an option which is not in terms with the other options as regards what principal offensive strategy should be.

Now, what the term principal offensive strategy refers to is that it is a type of corporate strategy that pushes for changes within the industry. What we are trying to say is that, the principal offensive strategy pursues an agenda that is pushing for a change within the industry.

Efforts might be concerted or individual steps might be taken. Hence, various techniques or strategies are in place to be used.

Offensive strategy types includes, an end run strategy where a company does not want competition and thus explore the part of the market with little or none.

A preemptive one which seek to conform some advantages on the company as it is the first one based on demographics

Others include: an acquisition and a direct attack strategy

3 0

3 years ago

Your firm's last three years of sales have been $1 million, $2 million, and $3 million (oldest to most recent). Year-end invento

Nitella [24]

Answer:

we will save 500,000 dollars worth of inventory.

Explanation:

If sales are 4,000,000 then the expected inventory will be 1,000,000

Giving an inventory turnover of:

4,000,000 / 1,000,000 = 4

IF we double the inventory turnover then:

4,000,000/inventory = 8

So the inventory will be of: 4,000,000/8 = 500,000

the difference is for 500,000

6 0

3 years ago