Answer:
Option (C) is correct.
Explanation:
Consumer income is one of the main determinant of demand. Consumer income is related with the demand of normal and inferior good.
If there is an increase in the income of a consumer then as a result the demand for a normal good increases and shifts the demand curve rightwards.
If there is a fall in the income of the consumer then as a result the demand for a normal good also decreases and shifts the demand curve leftwards.
Alternatively, the consumer income is inversely related with the demand for inferior goods.
Answer:
A. doesn't lose any sales when it raises its price
Explanation:
- As monopoly is ruled by one set of prices and they are price makers thus even f the prices rise the price will be set above the marginal cost to maximize the profits. Thus a monopoly does not lose its market share as it acts as a single dominating factor in the supply and trade of the goods and services. And it stipulates the financial dealing through a single seller.
Answer:
Answer is B
Explanation:
Cash flow = Net Income + Adjustment for Non-Cash expenses
So we must first calculate the Net Income for the second year using the Profit and Loss Statement format:
Year 2
Revenue $400,000
Less Expenses ($220,500)
Less Depreciation ($ 20,000)
Profit before Tax $159,500
Less Tax ($54,230) {34% of Profit before Tax}
Net Income $105,270
Add Depreciation $20,000
Cashflow $125, 270
{Remember Depreciation is a non cash expense, so we must add it to the Net income to arrive at the cash flow}
(Remember the company expects no change in revenue)
Answer:
9.69%
Explanation:
Given the following :
Net income = $4819
Total asset = $38,200
Taxable income = $6,100
Dividend payout ratio = 30% = 0.3
The internal growth rate is calculated thus ;
(Return on asset × Retention ratio)/[1-(Return on asset × Retention ratio)]
Return on asset = (Net income / total asset)
Return on asset = ($4,819 / $38,200)
Return on asset = 0.12615
Retention ratio = 1 - Dividend payout ratio
Retention ratio = 1 - 0.3 = 0.7
Hence internal growth rate :
(0.12615 × 0.7) / 1 - (0.12615 × 0.7)
0.088305 / 1 - 0.088305
0.088305 / 0.911695
= 0.0968580
= 0.0968580 × 100%
= 9.685%
= 9.69% ( 2 decimal places)
Answer: "The rise in the price of a pair of running shoes will increase the supply of running shoes".
This statement is <u><em> false</em></u> because <em><u>a decrease in demand for running shoes does not increase the price of a pair of running shoes and an increase in the price of a pair of running shoes does not increase the supply of running shoes. </u></em>
This occurs as the price of a pair of running shoes increases,therefore decreasing the demand and thus the supply will not increase.
