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Vedmedyk [2.9K]
3 years ago
10

When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quanti

ty demanded of good A falls to 400 units. Using the midpoint method, O 1. the price elasticity of demand for good A is 0.67, and an increase in price will result in an increase in total revenue for good A O2 the price elasticity of demand for good A is 1.50, and an increase in price will result in a decrease in total revenue for good A. O 3. the price elasticity of demand for good A is 1.50, and an increase in price will result in an increase in total revenue for good A O 4 the price elasticity of demand for good A is 0.67, and an increase in price will result in a decrease in total revenue for good A
Business
1 answer:
olga55 [171]3 years ago
7 0

Answer: The price elasticity of demand for good A is 0.67, and an increase in price will result in a increase in total revenue for good A

Explanation:

The following can be deduced form the question:

P1 = $50

P2 = $70

Q1 = 500 units

Q2 = 400 units

Percentage change in quantity = [Q2 - Q1 / (Q2 + Q1) ÷ 2 ] × 100

Percentage change in price = [P2 - P1 / (P2 + P1) ÷ 2 ] × 100

% change in quantity = (400 - 500)/(400 + 500)/2 × 100

= -100/450 × 100

= -22.22%

% change on price = (70 - 50)/(70 + 50)/2 × 100

= 20/60 × 100

= 33

Price elasticity of demand = % change in quantity / % change on price

= -22.22 / 33

= -0.67

This means that a 1% change in price will lead to a 0.67% change in quantity demanded. As there was a price change, there'll be a little change in quantity demanded because demand is inelastic. Thereby, he increase in price will lead to an increase in the total revenue.

Therefore, the price elasticity of demand for good A is 0.67, and an increase in price will result in an increase in total revenue for good A

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The Cozy Company manufactures slippers and sells them at $ 10 a pair. Variable manufacturing cost is $ 5.75 a​ pair, and allocat
yulyashka [42]

Answer:

(b) $ 43 comma 750 ​increase

Explanation:

Consider the Incremental Costs and Revenues arising from accepting the Special Order.

Note: Cozy Company has  enough idle capacity available to accept a​ one-time-only special order, therefore the fixed costs are irrelevant for this decision, since order is accepted within the normal operating capacity.

Sales (25,000×$ 7.50)                                  $187,500

Variable manufacturing (25,000× $ 5.75)  ($143,750)

Net Income/(loss)                                           $43,750

<u>Conclusion</u>

Therefore, Operating Income would increase by $43,750 as a result of Accepting the Special Order.

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7 0
3 years ago
Following is a recent BusinessSoftware Corp. press release: REDMOND, Wash.—March 16, 2016 — BusinessSoftware Corp. today announc
Dimas [21]

Answer:

Explanation:

1. The journal entry for declaration of dividend is shown below:

Retained Earnings A/c Dr

= (8,600 million shares × $0.18 per share) = $1,548 million

          To Dividend payable in cash                                         $1,548 million

(Being dividend is declared)

2. No journal entry should be passed on the record date

3. The journal entry for payment of the cash dividend is shown below:

Cash dividend payable A/c Dr     $1,548 million

      To Cash                                                              $1,5480 million

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5 0
3 years ago
Thailand has a comparative advantage in rice and an absolute advantage in cell phones Indonesia has a comparative advantage in c
Aleonysh [2.5K]

Answer:

d. Thailand should export rice and import cell phones

Explanation:

Analyzing the question, it is correct to say that Thailand should export rice and import cell phones.

To understand why this statement is correct, we need to understand the concept of comparative advantage and absolute advantage.

The comparative advantage occurs when a country has great efficiency in producing a certain good, that is, the production is specialized and therefore advantageous in relation to another country. So it is correct to say that Thailand, having a comparative advantage in rice, should export rice to achieve greater economic advantage.

The absolute advantage, on the other hand, corresponds to the production of a good with lower costs than another country, but Thailand should import cell phones because Indonesia has a comparative advantage in cell phones, which makes it more competitive than Thailand in this segment.

3 0
2 years ago
Which of the following factors has the LEAST influence on an individual’s core belief system? a. Physical appearance c. Religiou
loris [4]

Answer:

a. Physical appearance

Explanation:

The Physical appearance of a person is as a result of the genetic make up of the individual. This factor barely has an influence on an individual’s core belief system.

Religious background is a key element of individual’s core belief system as it forms the basis of one's belief about God, life, fate and destiny.

Family upbringing forms the basis of one's belief as the individual grows. The influence of the members of a family forms a part of the individual's core belief.

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Answer:

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Explanation:

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Required annual savings ($) = [Required future worth / FVIFA(r%, N)] / (1 + r)

= 725,000 / [FVIFA(10%, 10) * 1.1]

= 725,000 / (15.9374 * 1.1)

= 725,000 / 17.53114

= 41354.98318991235

= $41,354.98

Note: Since this is annuity due (deposit made at beginning of year), FV is divided by (1+r).

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