Answer: 4.7%
Explanation:
Expected return is calculated as:
= Risk free return + Beta ( Market risk premium)
10.8% = 5% + (1.22 × Market risk premium)
10.8% - 5% = 1.22market risk premium
5.8%/1.22 = market risk premium
Market risk premium = 0.058/1.22
Market risk premium = 0.047
Market risk premium = 4.7%
After the trade the other island has a total of 150 coconuts and 1300 fish.
<h3>What do you mean by the comparative advantage?</h3>
Comparative advantage refers to the maximization of the efficiency of the economy and its well being by focusing on the production of those resources, which country can produce and exports them in the exchange of those goods, which a country does not produce.
One can have the comparative advantage at production if it could produce the goods at lower cost as compare to the others.
Here, both the islands focus only on the making of the thing they're best at doing.
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C. To see if most people are interested to even try and new place to eat for lunch
If two identifiable markets differ with respect to their price elasticity of demand and resale is impossible, a firm with market power will set lower price in the market that is more price elastic.
Under price discrimination, a monopolist charges different prices in different sub-markets. Thus, a monopolist divides the market into sub-markets based on their price elasticity of demand.
So, if there are two identifiable markets, where the customer would want to buy from you, these markets will differ with respect to their price elasticity of demand and here resale is impossible.
Hence, a firm with market power will set lower price in the market that is more price elastic.
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