Answer: A
Explanation:
A complementary good is a product that is used together with another product. Without its complement, such a good will have little value. When there is increase in the price of a particular product, the demand of its complement reduces because consumers may not be able to use the complement on its own.
Complements have negative cross elasticity of demand i.e there is increase in the demand for a product when the price of its complement reduces. If bicycles and gasoline are complements, an increase in tax on gasoline will have a negative effect on the demand for bicycle. Due to the price increase of gasoline, less people will demand for bicycle. The initial change that will occur as a result of this is that as there is a price increase for gasoline, there will be a leftward shift in the demand for bicycle. This implies that less bicycle will be demanded for.
Answer:
The options that are true regarding dividends include:
- A stock dividend increases the number of outstanding shares.
- A stock dividend commonly indicates management's confidence that the company is doing well.
Explanation:
A stock dividend is a payment to shareholders that is made in shares rather than in cash.
Once investors receive stock dividends, the number of their shares will increase. this validates the first statement
Secondly, stock dividends have a tax advantage for the investor. The share dividend, like any stock share, is not taxed until the investor sells it unless the company offers the option of taking the dividend as cash or in stock.
The stock dividend has the advantage of rewarding shareholders without reducing the company's cash balance thereby indicating management's confidence in the company is well-being.
Answer:
c. $357,000
d. $733,000
e. $120,000
Explanation:
As we know that
Total assets = Total liabilities + Shareholder equity
The computation is shown below:
c. Updated assets would be
= $720,000 - $168,000
= $552,000
And, the updated liabilities would be
= $180,000 + $15,000
= $195,000
So, the updated capital would be
= $552,000 - $195,000
= $357,000
d. Updated assets would be
= $720,000 - $175,000
= $895,000
And, the updated liabilities would be
= $180,000 - $18,000
= $162,000
So, the updated capital would be
= $895,000 - $162,000
= $733,000
e. The opening capital would be
= Total assets - total liabilities
= $720,000 - $180,000
= $540,000
And, the ending capital would be
= Total assets - total liabilities
= $880,000 - $220,000
= $660,000
So, the gain would be
= Ending capital balance - opening capital balance
= $660,000 - $540,000
= $120,000
Answer:
The total revenue is likely to increase.
Explanation:
If the proportionate change in quantity demanded is smaller than the proportionate change in quantity, it implies that the price elasticity of demand is relativity inelastic.
In this situation, if the company increases the price of the product, the decline in quantity demanded due to the increase in price will be less than proportionate.
So it is likely that the total revenue from sales will increase because of the increase in price.
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