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laila [671]
2 years ago
15

The substitution effect of an increase in the price of Raisin Bran refers to Select one: a. the decrease in the demand for Raisi

n Bran when its price rises. b. the result that consumers will now switch to a substitute good such as Cheerios, and the demand curve for Raisin Bran shifts to the left. c. the fact that the higher price of Raisin Bran lowers consumer's purchasing power, holding money income constant. d. the fact that the higher price of Raisin Bran relative to its substitutes, such as Cheerios, causes consumers to buy less Raisin Bran.
Business
1 answer:
EleoNora [17]2 years ago
5 0

Answer:

the fact that the higher price of Raisin Bran relative to its substitutes, such as Cheerios, causes consumers to buy less Raisin Bran.

Explanation:

the substitution effect arises when as a result of a rise in the price of a good, the good becomes more expensive relative to its substitutes. Consumers not consume less of the good and more of the substitute. This leads to a movement up along the demand curve for that goods and not a movement along the demand curve for the good and not a shift of the demand curve.

If the price of the good increases. The good becomes cheaper when compared with substitutes. As a result, the demand for the good increases while that of the substitutes decreases.

The income effect is when an increase in price lowers consumer's purchasing power, holding money income constant.

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Newark Company has provided the following information:
djverab [1.8K]

Answer:

$1829000.

Explanation:

Given: Cash sales, $540,000.

           Credit sales, $1,440,000.

           Sales returns and allowances, $99,000.

           Sales discounts, $52,000

Now, computing net sales of Newark.

Net sales= Cash\ sales+ Credit\ sales- Sales\ discount- Sales\ return

Net sales= 540000+ 1440000- 99000-52000

⇒ Net sales= 1980000- 151000

∴ Net sales= \$ 1829000

Hence, Newark´s net sales is $1829000.

7 0
3 years ago
Wayman Corporation reports the following amounts in its December 31, 2018, income statement.
Viktor [21]

Answer:

Wayman Corporation's Net Income for the year ended December 31, 2018 is $64,000.

Solution in excel file is also attached for your reference.

Explanation:

                                                 Wayman Corporation  

                        Income Statement for the year ended Dec 31, 2018  

 

Sales Revenue                                                      $348,000  

Less: Cost of Goods Sold                                      $124,000  

Gross Profit                                                               $224,000    

Less Expenses:    

Operating Expenses  

 Selling Expenses  

   Salaries Expense                      $34,000  

   Advertising Expense                      $24,000  

  Total Selling Expenses              $58,000    

 General & Admin Expenses  

   Utilities Expense                      $44,000  

  Total General & Admin Expenses   $44,000    

 Total Operating Expenses                                     $102,000    

Income from Operations                                     $122,000    

Other Expenses  

Interest Expense                                                     $14,000    

Income before income taxes                              $108,000    

Less: Income Tax Expense                                     $44,000    

Net Income                                                              $64,000  

Download xlsx
4 0
3 years ago
Suppose someone takes out a home improvement loan for $30,000. The annual interest on the loan is 6% and is compounded monthly.
dsp73

Answer:

Explanation:

Monthly interest = 6 / 12 = .005

principal amount a₀ = 30000

an denote the amount owed at the end of the month

amount owed at the end of one month

a₁= 1.005 x a₀ - 600

amount owed at the end of 2 nd  month

a₂= 1.005 x a₁ - 600

amount owed at the end of nth month

an =  1.005x an-1  - 600 for n ≥ 1

4 0
3 years ago
The Boat Company has a capital structure of 30 percent riskless debt and 70 percent equity. The assumed tax rate is 23 percent.
mash [69]

Answer: 0.68

Explanation:

Using the measures given, the equity beta can be calculated as:

Equity beta = Asset beta * (1 + (1 - Tax rate) * (Debt/Equity)

= 0.9 * ( 1 + ( 1 - 23%) * (30% / 70%)

= 1.593 * 0.3/0.7

= 0.68

7 0
3 years ago
Kesterson Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.20 Direct labor
Ludmilka [50]

Answer:

Indirect manufacturing cost=  $22100

Explanation:

We are provided with the following information:

Direct materials $ 6.20

Direct labor $ 3.10

Variable manufacturing overhead $ 1.35

Fixed manufacturing overhead $ 14,000

Sales commissions $ 1.50

Variable administrative expense $ 0.40

Fixed selling and administrative expense $ 4,500

6,000 units are produced

Indirect manufacturing cost= variable overhead + fixed manufacturing overhead= 1,35*6000+14000= $22100

5 0
3 years ago
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