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Nastasia [14]
3 years ago
10

Based on the substitution effect, which example reflects how people would likely respond to a rise in gas prices

Business
1 answer:
ki77a [65]3 years ago
4 0

Answer:

People will purchase more fuel efficient cars

Explanation:

People will purchase more fuel efficient cars in order to reduce the consumption of gas.

Better still, this will also leads to increase in the quantity demanded for electric cars; as they did not require gas to operate.

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Read 2 more answers
Assume that each unit demanded generates $70 in revenue and that each unit ordered costs $50. How much will the company gain or
Vanyuwa [196]

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Note: The full question is attached as picture below

a. Let X is denoted as company’s monthly demand, P(X=x) is denoted as the probability of the company’s monthly demand.

The expected value is obtained below:

E(X) = (300*0.20) + (400*0.30) + (500*0.35) + (600*0.15)

E(X) = 60+120+175+90

E(X) = 445

b. The expected value of the monthly demand is 445. The each unit demands the revenue to generate is $70 and their cost is $50.

The gain/loss of the company = (300*(70−50)) - (145*50)

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4 0
3 years ago
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