Answer:
The correct answer is letter "C": the effect of the decrease in price on total revenue dominates the effect of the increase in quantity demanded on total revenue; overall total revenue declines.
Explanation:
Goods or services have inelastic demand when changes in prices do not affect their quantity demanded. If prices decrease or increase, the quantity demanded will remain at the same level or the change will be so minimal that it is not perceived. It is said then that <em>the decrease in price dominates the effect of the changes in quantity demanded.
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However, <em>if prices decrease and the quantity demanded remains the same, the company's overall revenue will decrease.</em>
Answer:
FV= $857,840.94
Explanation:
Giving the following information:
First investment:
Annual deposit= $5,000 per year
Interest rate= 10%
Number of years= 5
Second investment:
Number of years= 35
Interest rate= 10%
Lumpsum= first investment
First, we need to calculate the future value of the first investment. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {5,000*[(1.1^5) - 1]} / 0.10
FV= $30,525.5
Now, the future value of the second investment.
FV= PV*(1+i)^n
FV= 30,525.5*(1.1^35)
FV= $857,840.94
Answer:
a. 550,000
Explanation:
The gain on the asset is calculated by the sales proceeds minus the original cost of the asset.
In this question the home' initial cost is $200,000 and it is sold on $750,000. In absence of any unusual or hardship circumstances, the direct gains is $550,000 ( $750,000 - $200,000) as all the closing costs are paid by the buyer, so, Barney ans Betty should include the whole gain of $550,000 in the gross income.
Answer: The correct answer is C. The value of the best alternative that is given up in order to do or get something.
Explanation: Opportunity cost literally means alternative thing forgone - meaning what is given up to get something <em>(sacrifice</em>). It is a concept used by economists to allocate limited resources for production, consumption, distribution and exchange of goods and services. Production of goods or services entails the creation of value. In other words, it gives a more understanding on how limited resources are allocated in order to satisfy the human insatiable desires.
For example, a student may be constrained with limited amount of pocket money, say $100 and the student wants to buy textbooks that cost $10 each or go for different outings going for $20 each. In this scenario, the student has different options: a) buy 10 textbooks and 0 outing b) buy 8 textbooks and a outing c) 6 textbooks and two outings d) 4 textbooks and three outings e) 0 textbooks and five outings. For the student to have any more of the other, he has to give up the other unit. What is given up is called opportunity cost.
The profits will peak and decline.
during this stage of the product development, the product is already widely accepted by the market.
Eventually, the newer and better product will start to appear and the previous one will started to lose popularity and decline in profits.
