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Marina86 [1]
3 years ago
13

Blake eats two bags of potato chips each day. Blake's hourly wage increases from $9 to $15, and he decides to stop eating generi

c chips and instead eats a name brand potato chip. Use the midpoint method to calculate Blake's income elasticity of demand for generic potato chips.
Business
1 answer:
max2010maxim [7]3 years ago
8 0

Answer:

-4 units

Explanation:

Using the midpoint method, Blake's income elasticity of demand for generic potato chips is given by the change in demand (D) multiplied by his average income (I), divided by the change in income multiplied by the average demand:

E=\frac{\Delta D}{\Delta I}*\frac{I_{avg}}{D_avg}\\E=\frac{0-2}{15-9}*\frac{\frac{9+15}{2}}{\frac{2+0}{2} }\\E=-4\ units

Blake's income elasticity of demand is -4 units.

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2 years ago
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4 years ago
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Granger has a boat worth $4,000 and a car worth about $8,000. He also has roughly $500 worth of tools. What is the value of asse
natita [175]

Answer:

$12,500

Explanation:

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8 0
3 years ago
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8 0
2 years ago
Goodwin Technologies has been wildly successful but has yet to pay a dividend.
nydimaria [60]

Answer and Explanation:

The computation is shown below:

Year       Cash flow            PVF at 12%         PV at 12%

D0             0            0            1                         0

D1              0            0            0.89286                 0

D2             0            0            0.79719                  0

D3            2.25       2.25       0.71178               1.601505  (A)

D4   2.25 × 1.117^1 = 2.51325 0.63552           1.597221  (B)

D5   2.25 × 1.117^2 = 2.80730 0.56743          1.592946  (C)

Now

Horizon Value at  D5 is      

= Next Year Dividend  ÷ (Required Rate  -Growth rate)    

= (2.25 × 1.117^2 × 1.036) ÷ (0.12 - 0.036)

                34.6234  34.6234 0.56743             19.64634  (D)

Current Value                                                    24.43801  (A + B + C + D)

Horizon Value = 34.62    

Intrinsic Value = 24.43

Now  

Current expected dividend yield is

= Dividend  ÷ Market Price

= 0 ÷ 24 ÷ 43

= 0 %

And, the minimum expected capital yield should be equivalent to the required rate of return i.e 12%

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5 0
3 years ago
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