What do Rational decision makers use to make economic decisions?

Suppose that Dunkin Donuts reduces the price of its regular coffee from $2 to $1 per cup, and as a result, the quantity sold per

harkovskaia [24]

Answer:price elasticity of demand for Dunkin Donuts’ regular coffee is 1.8

Explanation: Using the midpoint formnulae

Price elasticity of Demand =percentage change in quantity demanded/ Percentage change in price.

Percentage change in quantity = new quantity - old quantity / (new quantity + old quantity)/2 x 100

= 40-10/(40+10)/ 2 = 30 /25 = 1.2 x 100 =120%

Percentage change in price = new price - old price / new price + old price)/2 x 100

= 1- 2 / (1+2)/2= -1/1.5x 100 = -66.67 %

Price elasticity of Demand =percentage change in quantity demanded/ Percentage change in price.

= 120%/-66.67%= -1.79 = -1.8

For Price elasticity of demand, the sign is not included and the basis for elasticity is on the value itself . here we can conclude that the Price elasticity of demand for Dunkin donut is 1.8 and elastic because a fall in price led to an increase in amount being sold.

3 0

3 years ago

If fixed costs are $100,000, variable cost per unit is $40, and the selling price is $60, how many units must be sold for the fi

Margarita [4]

In order to break even, they would need to sell at least 5,000 units

Break even point is calculated by the formula:

Fixed costs÷(selling price -variable costs per unit)

i.e.

100,000 ÷ (60-40) = 5,000

Anything they sell above this number will start to produce profits for the company

3 0

3 years ago

What is the range for the relative price of cloth such that the economy produces both cloth and food? From _______ to _______ .

dezoksy [38]

The answer is explained in detail below

Explanation:

$a_{KC} = 2$

$a_{LC} = 2$

$a_{KF} = 3$

$a_{LF} = 1$

Labor, L = 2000; Capital, K = 3000

Labour constraint,

$2Q_{c} + Q_{F} \leq 2000$

Capital constraint ,

$2Q_{c} + 3Q_{F} \leq 3000$

Solving the equation further, we get

$Q_{F} \leq 2000 - 2Q_{C}$

$Q_{F} \leq 1000 - \frac{2}{3} Q_{C}$

The range for the relative price of cloth such that the economy produces both cloth and food is 2/3 and 2

Low cloth production → economy will use relatively more labor to produce cloth → opportunity cost of cloth is 2/3rd units of food.
High cloth production → economy dips on labor → taking capital away from food production → raising opportunity cost of cloth to 2 units of food.

If relative price of cloth lies between 2/3 and 2 units of food, the economy produces both goods.
If the price of cloth decreases below 2/3 → complete specialization in food production → low compensation for producing cloth
If the price of cloth rises above 2 → complete specialization in cloth production → low compensation for producing food

4 0

3 years ago

A perfectly competitive market has a. only one seller. b. at least a few sellers. c. many buyers and sellers. d. firms that set

Natali [406]

Answer:

c. many buyers and sellers.

Explanation:

A perfect market for competition is a market that has a high level of competition.

It has the following features -

1. With regard to the market, knowledge is great in this rivalry between producer and consumer.

2. Free entry, and exit

3. Deals with same or homogeneous products

4. The sellers and buyers are more in this market

5 0

3 years ago

Both parties to a valid and enforceable contract must provide consideration. In a contract for the sale and purchase of real est

Wittaler [7]

Answer:

The correct answer is C

Explanation:

The seller consideration is the consideration which is defined as to take the property off the place as well as the market it into the escrow.

For example, if the buyer wants to bought the house, then the buyer will provide an earnest amount of money deposit (it will be the consideration of the buyer), and the seller would agree to sell the home to the buyer (it is the seller consideration).

So, in the agreement of sale and the purchase of the real estate, the seller consideration is to give the property to the buyer.

3 0

3 years ago