A recent hurricane destroys half the orange crop. Assuming that the demand for oranges is relatively inelastic, the short impact
1 answer:
Answer:
1. Demand would REMAIN THE SAME.
Demand would not change as we are told that demand is relatively inelastic.
2. Supply of oranges will DECREASE.
The hurricane destroyed half of the orange crop. This means that there will be less oranges to sell in the market so the supply will reduce.
3. Market Price of Oranges will RISE
With the supply decreasing and the demand remaining the same, the supply curve will shift left and the new equilibrium will be a higher market price to account for the scarcity.
4. Market Quantity will DECREASE
As the supply to the market decrease, the Quantity available in the market will decrease as well.
5. Total Revenue will RISE.
When market prices rise for a commodity with inelastic demand, total revenue will invariably rise.
You might be interested in
Answer:
$328000
Explanation:
Given: Cost of machine= $880000
Residual value= 60000
Estimated life= 10 years
Company use straight line depreciation method.
∴ Depreciation =
⇒ Depreciation=
∴ Depreciation= per year.
Now, lets find the value of depreciation.
∵ Machine is sold on December 31, 2019, which is 6 years after it is installed.
∴ Depreciation value after 6 years=
Depreciation value after 6 years=
Next, finding the value of machine after 6 years of depreciation.
Value of machine after 6 years=
∴ Disposal value of machine after 6 years of usage is , however, machine was sold at $225000.