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laila [671]
3 years ago
11

If the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to $1.80 will:

Business
1 answer:
saul85 [17]3 years ago
5 0

Answer:

c

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.  

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.

Percentage change in price = (1.8 - 2) / 2 = -0.10

2.5 = percentage change in quantity demanded / -0.10

percentage change in quantity demanded = 0.10 x 2.5 = 0.25 = 25%

Because there was a decrease in price, demand would increase by 25%

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15 points!
nordsb [41]

Answer:

rent

Explanation:

The rent expense will be difficult to revise. Usually, the rent amount is contained in a tenancy agreement signed by both the landlord and the tenant. The rent amount does not change until the lease or tenancy agreement expires. Changing the rent amount would require the landlord's consent.

Due to the above reasons, rent is classified as a fixed cost. It remains constant in the short run.

5 0
3 years ago
Read 2 more answers
Mercedes-Benz has a self-driving car capable of 80 miles-per-hour speed. You have to keep your hands on the wheel in this E-clas
Ket [755]

Answer:

I would use survey research to determine the general opinion, positive or negative, on the feature from the general public.  

Explanation:

When conducting any survey research, it is important to sample a wide variety of people. In this case, you would want to survey the general population, not just former Mercedes customers.  

I would design a focus group survey with a series of questions where participants can choose from a range, 0-5, on how much they agree with a certain statement.

At the beginning of the survey, participants would read a brief paragraph explaining the features on the new car before continuing to the part where they record their responses.

Once the survey is conducted, the data can be analyzed. If the majority, say 70%, of all people surveyed agree strongly that a self driving car is a good idea and that the world is ready then you can assume that the general population is in fact ready.

7 0
3 years ago
​Belstone, Inc. is a merchandiser of stone ornaments. It sold​ 15,000 units during the year. The company has provided the follow
Georgia [21]

Answer: $200,100

Explanation:

Given that,

Units sold = 15,000

Sales Revenue = $510,000

Purchases​ (excluding Freight​ In) = $310,500

Selling and Administrative Expenses = $36,000

Freight In = $15,900

Beginning Merchandise Inventory = $42,500

Ending Merchandise Inventory = $59,000

Cost of goods sold = Beginning Merchandise Inventory + Purchases​ + Freight In - Ending Merchandise Inventory

                                = $42,500 + $310,500 + $15,900 - $59,000

                                = $309,900

Gross Profit = Sales Revenue - Cost of goods sold

                    = $510,000 - $309,900

                    = $200,100

8 0
3 years ago
In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the desired reserve/deposit ratio is
kotegsom [21]

Answer:

the money supply in Macroland will increase from <u>5,000</u> econs to <u>7,000</u> econs

Explanation:

Currently, Macroland's money supply = 2,000 econs held by the public and 3,000 econs held by the banks (= 300 econs x 1/0.1).

In order to determine the increase in the money supply we must multiply the inflow of econs by the money multiplier. The money multiplier = 1 / reserve ratio = 1/0.1 = 10.

Since the government is injecting 200 econs to the economy, the increase in the money supply = 200 econs x 10 = 2,000 econs.

So now, Macroland's money supply will increase from 5,000 to 7,000 econs.

The money multiplier measures the banking system's ability to "create" money. The banking system creates money by first receiving deposits, e.g. you deposit 10 econs in your savings account, and then lending money to another client. The bank will lend 9 econs (-10% required reserve) to John that will purchase a bike. The seller of the bike receives the money form John and deposits the 9 econs in his own bank. Then this second bank will lend 8.10 econs to Sarah. Sarah will use the money to purchase a new computer and a printer from Tom. Tom then deposits the money in his bank, and then his bank lends 7.29 econs to Sally, and the wheel goes on and on.

This money creating process is possible because Macroland uses a fractional banking system, which means that the banks are only required to keep a fraction of total deposits as reserves.

7 0
3 years ago
Southern Home Cooking just paid its annual dividend of $.75 a share. The stock has a market price of $16.80 and a beta of 1.14.
SIZIF [17.4K]

Answer:

The multiple choices are:

9.98 percent

10.04 percent

10.79 percent

10.37 percent

10.45 percent

The third option of 10.79% is correct

Explanation:

The cost of equity according to Miller and Modgiliani capital asset pricing model is given below:

Ke=Rf+beta*(Mrp-Rf)

Rf is the risk free rate which is the return on government security is 2.7%

beta is 1.14

Mrp is the market risk premium is 7.1% which is given in the formula as (Mrp-Rf)

Ke=2.7%+1.14*7.1%

Ke=2.7%+8.09%

Ke=10.79%

Hence the correct option out of the options given above is the third option

It is expected that any shareholder that invests in the shares of Southern Home Cooking would get return of 10.79%

8 0
3 years ago
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