Answer:
If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.
Explanation:
Perfectly inelastic demand curve indicates the quantity demanded for the life-saving medicine remains the same or does not change in response to a change in price.
Since a part of the law of supply states that the lower the quantity supplied, the higher the price; a reduction in the supply of the life-saving medicine will increase its price.
The combining effect of the two above will lead to an increase in the equilibrium price while the equilibrium quantity will remain the same as it will not respond to the change in price.
The attached graph explains this more clearly. In the graph, the demand curve DD is used to represent the perfectly inelastic demand curve for the life-saving medicine. Therefore, the quantity remains at q no matter the changes, either increase or decrease, in price. Movement from the supply curve S1 to S2 indicates a reduction in supply of the life-saving medicine which causes an increase in the equilibrium price from Po to P1 while the equilibrium quantity stays at q.
This therefore shows that if the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.
Answer:
Explanation:
Advancements in technology and changes in communication generally go hand in hand. Landlines displaced the telegraph and cell phones replaced landlines. The arrival of the internet opened new doors of personal communication. E-mails replaced postal mails and social media took the place of text messages
Answer:
Proactive Stance
Explanation:
In business, Proactive Stance means that you take a precautions to handle the events that might occur in the future.
Maintaining loyal customers base and good core values tend to require higher cost for the company. since it has to put more investment in high level customers service or high quality materials.
But, in the long run, this will be beneficial for the company. Loyal customers tend to be the least likely to switch to another product. Not only that, if in the future company made a mistake that damage its reputation, loyal customers tend to be more forgiving. This is why maintaining loyal customers base tend to be considered as a proactive stance.
Answer: 10.11%
Explanation:
The effective annual interest rate on this lending arrangement will be calculated thus:
Interest Paid will be:
= 9% × $21 million
= 0.09 × $21 million
= $1.89 million
Amount Received will then be:
= (21million - 1.89million) - (21million)(0.02)
= $19.11 million - $0.42 million
= $18.69 million
Then, the effective annual rate will be:
= 1.89/18.69
= 10.11%
Therefore, the effective annual interest rate on this lending arrangement is 10.11%.
Answer:
False
Explanation:
When the taxpayer has purchased several lots of stock on different dates at different prices and cannot identify the lot of stock that is being sold. In such a situation the stocks are not identifiable, therefore, both the LIFO and FIFO methods of inventory valuation cannot be used. This is because both of these methods require identification of purchased lots of stocks to determine from which lots the goods are sold first. In such a situation only the Weighted average method (AVCO) can be used because it does not require identification of the stock lot from which the goods are sold.
