The 4 P's:
Price - cost of the product
Product - the type of good being sold
Place - how the product will get to the consumer (store, internet, etc)
Promotion - what marketing activities will be used to communicate the product (advertising, sales, etc)
Answer:
Income effect
Explanation:
Own price increases are associated with decreases in quantity demanded, ceteris paribus. These decreases in quantity demanded are composed of two effects, the substitution effect and the<u> Income effect.</u>
We know as per the law of demand, price increases lead to decrease in the quantity demanded if factor remain constant.
Quantity demanded has effect of two other major factors:
- Subtitution effect.
- Income effect.
Subtitution effect: It is the price of subtitution goods & services also lead to increase and decrease of demand for any particular goods.
Example: Price of tea and coffee.
Income effect: It is the income of consumer that effect the demand of any goods & sevices, as with the increase in income of consumer, their demand for inferior goods decreases and demand for branded goods increases.
Example: Non branded clothes and branded clothes.
Explanation:
The journal entries are as follows:
On July 1
Prepaid Insurance A/c Dr $20,700
To Cash A/c $20,700
(Being prepaid insurance is paid)
On December 31
Insurance expense A/c Dr $
To Prepaid insurance A/c $1,110
(Being the insurance expense is recorded)
The insurance expense is shown below:
= $20,700 ÷ 3 years × 6 months ÷ 12 months
= $3,450
Answer:
The cost of equity is 9.91%
Explanation:
The constant growth model of the DDM is used to calculate the price of the share or the fair value per share based on a constant growth in dividends and the required rate of return which is also known as cost of equity.
Plugging in the available values in the formual we can calculate the cost of equity or the required rate of return.
73.59 = 4.57 / (r - 0.037)
73.59 * (r - 0.037) = 4.57
73.59r - 2.72283 = 4.57
73.59r = 4.57 + 2.72283
r = 7.29283 / 73.59
r = 0.0991 or 9.91%
Answer:
inelastic demand
Explanation:
Price elasticity of demand (PED) measures the proportional change in quantity demanded when the price of a product or service changes:
- when a 1% decrease in price, increases quantity demanded in a smaller proportion, the PED is said to be inelastic.
- when a 1% decrease in price, increases quantity demanded in a larger proportion, the PED is said to be elastic.
- when a 1% decrease in price, increases quantity demanded in the same proportion, the PED is said to be unit elastic.
In this case, the decrease in price (-2%) barely increased the quantity demanded, therefore, the PED is inelastic.
