Answer:
a.increase spending by $100 billion.
Explanation:
For computing the effect, first we have to find out the multiplier then, the spending amount effect which is shown below:
Government spending multiplier = 1 ÷ (1 - marginal propensity to consume)
Government spending multiplier = 1 ÷ (1 - 0.90)
Government spending multiplier = 1 ÷ 0.10
So, Government spending multiplier = 10
Now the effect of spending would be
= Output level at full employment ÷ Government spending multiplier
= $1,000 billion ÷ 10
= $100 billion increase
Answer:
A market
Explanation:
A market traditionally was defined as a geographical and physical location where buyers are sellers meet to transact business.
With the advancement in the area of information communication technology (ICT), the word market has been redefined as not just a geographical location but any arrangement which bring a potential buyer and seller of goods and service into close contact for the purpose of transacting business.
Answer:
b. $19500000.
Explanation:
Break-even point is the level of sales on which business has no profit no loss situation. The business only covers the variable and fixed cost at this point.
Total Contribution can be determined by calculating adding estimated contribution of each division.
Total Contribution ratio = (65% x 30%) + (35% x 50%) = 19.5% + 17.5% = 37%
Fixed cost = $7,215,000
Break-even point = Fixed cost / Contribution margin ratio = $7,215,000 / 37% = $19,500,000
Product differentiation.
Dollar shave club is distinguishing their products as unique in the shaving market because they are convenient and affordable.