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OlgaM077 [116]
3 years ago
11

You are the only seller of eggs in town, and the price-elasticity coefficient for eggs is known to be 0.8. if you want to increa

se your sales quantity by 10 percent through a price change, what should you do to price?
Business
1 answer:
kirill [66]3 years ago
5 0

Answer:  To increase sale by 10%, the seller must lower the price of the good by 12.5%.

Explanation: Price elasticity of demand measures the responsiveness of quantity demanded to a change in the price. Since, demand and price for a normal good are negatively related to each other, price elasticity is also negative. It can be calculated using,

e_{d}=\frac{Precentage change in quantity demanded}{Percentage change in price}  -0.8=\frac{10}{Percentage change in price}  Percentage change in price = -\frac{10}{0.8}  Percentage change in price = -12.5

Therefore, to increase sale by 10%, the seller must lower the price of the good by 12.5%.

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Tanek Corp.’s sales slumped badly in 2017. For the first time in its history, it operated at a loss. The company’s income statem
Levart [38]

Answer:

a) Break-even point in dollar for 2017

Contribution margin ratio = Contribution Margin/Sales

C.M Ratio = (Sales - Variable Cost)/Sales

C.M Ratio = $(2,500,000-1,750,000)/2,500,000

C.M Ratio = 0.30 or 30%

Break-even point in dollars = Fixed expense/C.M Ratio

B-E point ($) = $850,000/0.30

= $2,833,333.33

<u>Alternative 1</u>

<em>Sales Price per unit after increasing 20%,</em>

Sales Price = ($5*0.2) + $5 = $6

Total Sales ($) = (Sales Price x Sales Units)

Total Sales ($) = ($6*500,000) =$3,000,000

Contribution margin ratio = Contribution Margin/Sales

C.M Ratio = ($3,000,000- $1,750,000)/$3,000,000

C.M Ratio = 0.42 or 42%

Break-even point in dollars = Fixed expense/C.M Ratio

B-E point ($) = $850,000/0.42

= $2,023,809.52

<u>Alternative 2</u>

<em>Commission</em> = $2,500,000*5% = $125,000

Change in fixed annual salaries = $150,000-$60,000 = $90,000

Total fixed costs after deducting the changes in fixed salaries = $850,000-$90,000 = $760,000

Contribution margin ratio = Contribution Margin/Sales

C.M Ratio = (Sales - Variable Cost - Commission on sales)/Sales

C.M Ratio = ($2,500,000-$1,750,000-$125,000)/$2,500,000

C.M Ratio = 0.25 or 25%

Explanation:

Sales = $2,500,000

Sales Unit = $2,500,000/500,000 = $5

Variable Cost = 1,750,000

Fixed costs = $850,000

7 0
3 years ago
Which of the following is a suggested policy on executive smartphone use?
azamat

Answer:

B. all of the above

Explanation:

Suggested policy on executive smartphone use:

  • Smartphone configuration and archiving policies.
  • A mandatory password requirement for smartphones.
  • A stated policy on deleting messages on smartphones
3 0
3 years ago
Words like denigrate, the undersigned, and expropriate are examples of high-level diction and should be used liberally in busine
rusak2 [61]

Answer:

False.

Explanation:

Communication through business messages should convey the information in the simplest words so that the other party can easily understand what is being said. It also needs to be brief and to the point.

Using high level diction liberally in business communication leads to unclear messaging. The reader may not know the meaning of the words so the aim of communication will be defeated.

Also high level diction can have different meanings in different circumstances.

High level diction should be used sparingly, and simple diction is preferred.

7 0
3 years ago
Read 2 more answers
Written laws that establish certain of conduct that must be adhered to by covered parties are called
gladu [14]
The correct answer is C. Codes

such laws are called codified laws. Statues are similar but on a smaller scale and apply only to those who participate, while executive orders are created by the president in times of trouble.
6 0
3 years ago
Builder's Outlet just hired a new chief financial officer. To get a feel for the company, she wants to compare the firm's sales
Shkiper50 [21]

Answer:

The answer is: Income statement

Explanation:

As she wants to get information on sales and costs, the Income statement is the statement that she should looking for. With the Balance sheet statement, it only shows information on the financial position reporting the firm's assets, liabilities and owner's equity at a specific point in time rather than the sales and costs firgures during the reporting period.

Furthermore, she should opt for Income statement rather than the common-size income statement because the common-size income statement hardly illustrates any trend during the recent years/ reporting periods, instead, it is only shown each revenue and cost items as percentage of total sales in a specific period.

In the income statement, there should be enough information for the new CFO to find trends on revenues and costs (if any) because the revenue and cost items is detailed enough and at least it should be given the comparision between sales & costs of the reporting period versus the firgures of the previous reporting period.  

8 0
3 years ago
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