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4vir4ik [10]
3 years ago
5

If the price of a soda was 15 cents in​ 1970, when the cpi was​ 50, and 50 cents in​ 2007, when the cpi was​ 172, then

Business
2 answers:
Lilit [14]3 years ago
6 0

Answer:

Increase in price $0.35 and consumer price also increase.

Soda after 37 years, consumer 122.

Explanation:

As per the question,

Soda was 15 cents in​ 1970, when the cpi was​ 50

50 cents in​ 2007, when the cpi was​ 172, then

cpi=  N.price/ Old.price

= 0.50/0.15

=3.33

No major increment after 37 years.

MA_775_DIABLO [31]3 years ago
3 0

Answer:

It then means that there was an increase in price of <em>$0.35 and an increase in the Consumer Price Index of 122</em>  of Soda after 37 years for inflationary reasons.

Explanation:

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

<em>Solution</em>

<em>CPI =  New Price/ Old Price</em>

<em>Where:</em>

<em>Old Price = $0.15</em>

<em>New Price = $0.50</em>

<em></em>

<em>∴ = 0.50/0.15 </em>

<em>CPI = 3.33</em>

<em>Then there was no significant rise on inflation since the CPI for 37 years was 3.33 </em>

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The company should accept the idea because profit will increase by $24,000.

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