Answer:
In the first range of prices (with PED 15 - 2.5) as the price of the good or service falls, total revenue should increase. Imagine that a 1% reduction in price will result in a 15% increase in quantity demanded. The same happens when PED = 2.5, since a 1% reduction will increase quantity demanded by 2.5%.
e.g. price = $100, quantity demanded = 100, total revenue = $10,000
- price falls to $99, quantity demanded increases to 115, total revenue = $11,385
- price falls to $99, quantity demanded increases to 102.5, total revenue = $10,147.50
On the other range (PED = 1.5 - 0.75) as the price of the good or service falls, at first total revenue will increase but then it will decrease.
e.g. price = $100, quantity demanded = 100, total revenue = $10,000
- price falls to $99, quantity demanded increases to 101.5, total revenue = $10,048.50
- price falls to $99, quantity demanded increases to 100.75, total revenue = $9,974.25
Answer and Explanation:
Given that
Consumption function C = 200 + 0.9Y
Investment I = 300
Aggregate expenditure AE = C + I
Equilibrium AE = Y
Based on the above information
a. The level of equibrium income is
Y = AE = C + I
Y = 200 + 0.9Y + 300
0.1Y = 500
Y = 5000
b. The value of the investment multiplier is
= 1 ÷ (1 - MPC)
= 1 ÷ (1 - 0.9)
= 10
c. The change in the level of equilibrium income if investment increases by 10 is
Y = 200 + 0.9Y + 310
0.1Y = 510
Y = 5100
Change is
= 5,100 - 5,000
= 100
<span>The building should be recorded in the corporation's account records as $405,000 because of it's assessed value for property tax purposes. The worth of the building ten years ago as well as the amount the corporation paid for it at that time no longer matters, and the current market value of the building also does not matter if the building is not being sold.</span>
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A type of analysis to understand Able's availability of resources to pay its short-term cash requirements is known as a liquidity measure.
<h3>What is liquidity?</h3>
Liquidity can be defined as the rate at which an asset or resource such as physical equipment, can be used to purchase any goods or services. This ultimately implies that, liquidity is a characteristics (quality) of money as a medium of exchange around the world.
In Financial accounting, liquidity is simply a measure of the availability of resources to pay current, liabilities, short-term cash requirements, or operating expenses of an entrepreneur or business firm.
Therefore, an analysis of the availability of resources is typically aimed at a company's funding requirements and ability to meet its financial obligations.
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