Answer:
A) Price elasticity of demand (PED) = 1
B) the PED is unitary
C) Danny's total revenue will decrease to $562.50
Explanation:
A) the formula for calculating price elasticity of demand is:
PED = % change in quantity demanded / % change in price
- % change in quantity demanded = (300 - 250) / 250 = 50 / 250 = 20%
- % change in price = ($2 - $2.50) / $2.50 = -$0.50 / $2.50 = -20%
PED = 20% / 20% = 1
B) the PED is unitary, it means that for every 1% change in the price, the demand will inversely change in 1%
C) since Danny lowered its price 20% from $2.50 to $2, he sold 20% more brownies, but his total revenue fell from $625 to $600. If he lowers his price even more, this time 25% to $1.50, his total sales will increase to 375 brownies, but his total revenue will continue to fall to $562.50
Answer:
Explanation:
2)
Calculation of P&L
Underlying Price = $ 57.70
Underlying Price is more than exercise price (40) ⇒ the option is exercised.
Initial Cash Flow = - $ 2.63
Cash Flow at Expiration = $ 57.70 - $ 40 = $ 17.70
Prrofit = $ 17.7 - $ 2.63 = $ 15.07
Answer:
Evaluation of the price of the basket of goods with time is not accountable for the changes that are made by the customers on the increase in price of a specific good.
Explanation:
Inflation can be defined as the increase in the overall price and it can be measured in terms of CPI, i.e., Consumer Price Index.
CPI is generally measured as the weighted mean of the prices of the goods, basket which is supposedly fixed for two to three years.
In case, the quantity of the sales of the goods increases even if the cost of the goods remains same, the customer will purchase more of these goods and this shows up in the CPI index.
The demand of theses goods may slow down with a rise in the price of these goods where the the basket value remain unchanged resulting in overstate inflation where the customer replaces the goods at high price with that of its competitor with low price.
Answer:
Organizational development would be most useful to the organization in terms of building their capacity to achieve greater effectiveness by developing and reinforcing strategies, structures, and processes
Explanation:
Organizational development would be most useful to the organization in terms of building their capacity to achieve greater effectiveness by developing and reinforcing strategies, structures, and processes using various interventions that target human capital, processes, and technology. The Organizational Development Manager administers development and training programs for company employees.