1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
FinnZ [79.3K]
3 years ago
14

For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Peacock is c

harging $200 per room per night. If average household income increases by 10%, from $50,000 to $55,000 per year, the quantity of rooms demanded at the Peacockrises from 300 rooms per night to 400 rooms per night. Therefore, the income elasticity of demand ispositive , meaning that hotel rooms at the Peacock area normal good . If the price of a room at the Grandiose were to decrease by 10%, from $250 to $225, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Peacockfalls from 300 rooms per night to 250 rooms per night. Because the cross-price elasticity of demand isnegative , hotel rooms at the Peacock and hotel rooms at the Grandiose are substitutes . Peacock is debating decreasing the price of its rooms to $175 per night. Under the initial demand conditions, you can see that this would cause its total revenue to decrease . Decreasing the price will always have this effect on revenue when Peacock is operating on theelastic portion of its demand curve.
Business
1 answer:
irina [24]3 years ago
5 0

Answer: The Demand should be in elastic

Explanation:

Peacock hotel rooms are a normal good and they have a negative price elasticity of demand, meaning a decrease in price of hotel rooms per night will increase quantity of hotels rooms demanded for Peacock.

Peacock is considering decreasing Prices to $ 175 per unit, for this decrease in Prices to lead to a decrease in total revenue, The demand for Peacock hotel rooms should be inelastic. When the demand for Peacock hotel rooms is inelastic a decrease in price to $ 175 will lead to a small change in the quantity of hotel rooms demanded for Peacock which will then lead to a decrease in Total Revenue.

You might be interested in
Milk is used in the production of cheese. Cheese and tofu are close substitutes in consumption. Milk and oreos are complements i
disa [49]

Milk is used in the production of cheese. Cheese and tofu are close substitutes in consumption. Milk and Oreos are complements in consumption. Suppose that the price of Oreos increases, how does this affect the market for tofu?

The correct answer is decreasing in price will increase the quantity demanded.

<h3>Why does price decrease when demand increases?</h3>

If demand does not change, there is an inverse relationship between the supply of goods and services and the price. As the supply of goods and services increases with the same demand, prices tend to fall to lower equilibrium prices and higher equilibrium quantities of goods and services.

The relationship between price and demand is negative. H. They are inversely proportional. The inverse relationship means that when the price of a product goes up, the demand for that product goes down, and vice versa. This is due to the law of reducing marginal utility.

Learn more about the price of oreos increases here

brainly.com/question/14500353

#SPJ2

8 0
2 years ago
Mountain river adventures offers whitewater rafting trips down the colorado river. it costs the firm $100 for the first raft tri
Natalka [10]
Add the first four numbers than u will need to know what increased means it means u either add or subtract $150 and than u find your answer
4 0
3 years ago
What earns interest and allows unlimited ATM use
Vesna [10]
Interest-bearing checking account.
3 0
3 years ago
On September 1, 2021, Triton Entertainment borrowed $24,000,000 cash to fund a new Fun Park. The loan was made by Nevada Bank. T
ryzh [129]

Answer:

1.

September 1, 2021     Cash                          $24,000,000 Dr

                                       Notes Payable             $24,000,000 Cr        

2.

December 31, 2021     Interest Expense         $960,000 Dr

                                           Interest Payable           $960,000 Cr

3.

May 30, 2022       Interest Expense         $1,200,000 Dr

                                     Interest Payable           $1,200,000 Cr

June 1, 2022       Notes Payable                   $24,000,000 Dr

                            Interest Payable                 $2,160,000 Dr

                                    Cash                                     $26,160,000 Cr

Explanation:

1.

The issuance of note against cash results in a debit to cash and a credit to a liability in account for notes payable.

2.

The adjusting entry will be made in accordance to accrual principle that matches the revenues and expenses relating to a certain period and record them in their respective period. The interest on note for 4 months from September to December belongs to 2021 and will be recorded as an expense and a payable on 31 december.

The interest expense for 4 months is = 24000000 * 0.12 * 4/12 = $960000

3.

The interest for the remaining 5 months will be recorded on the last day of note on May 30.

The interest for 5 months is = 24000000 * 0.12 * 5/12 = $1200000

On June 1, the note and the interest payable on note both will be paid and will be debited to close them from the books and cash will be credited.

8 0
3 years ago
Is bitcoin going to crash ?
yanalaym [24]
Yeah, actually probably. I bet.
3 0
3 years ago
Read 2 more answers
Other questions:
  • The starting salaries of individuals with an MBA degree are normally distributed with a mean of $40,000 and a standard deviation
    15·1 answer
  • Were did west African slave traders get their slaves to sell to Europeans ​
    9·1 answer
  • How much was nasa paid to launch west germany's spas-01 satellite in 1983?
    11·1 answer
  • Consider the following situations for Shocker:
    6·1 answer
  • At an output level of 415,400 units, you have calculated that the degree of operating leverage is 2.00. The operating cash flow
    9·1 answer
  • Suppose that the wage rate is $30 per hour, and the firm sells each unit of output for $6. Using the data from Table 7.3, how ma
    6·1 answer
  • XZYY, Inc. currently has an issue of bonds outstanding that will mature in 31 years. The bonds have a face value of $1,000 and a
    7·1 answer
  • MY STORE bought sweaters at a wholesale price of $12 and sold them for $34.99. Ron says the markup is $46.99 but you say he is w
    11·1 answer
  • On her way to a concert, Hermione stopped at a restaurant for dinner. In her purse, she had 12 bills worth a total of $40. She h
    11·1 answer
  • 1. Read the following data regarding payroll deductions, and answer the questions that follow:
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!