Answer:
b. Market value
Explanation:
Alpha' Co's trading securities are considered as cash equivalent item and recorded as current assets in the balance sheet, because of its short maturity period. The market value of securities should be reported on the balance sheet as on the year end of Alpha Co. So, Correct answer is Alpha should report the debt securities on its 20X9 balance sheet at Market value.
Marginal analysis studies how individuals decide: a. whether to go to college. b. whether to live on the margin of society. c. how much down payment to make when buying stocks. d. whether to do a bit more of an activity versus a bit less of it.
Answer:
Correct option is (d)
Explanation:
Marginal analysis is a decision making tool used by managers to identify if an additional effort on an activity or incurring additional cost would be beneficial or yield more profits.
In other words, individuals decide on the basis of marginal analysis whether to work more or a activity or not based on the outcome. If the outcome is profitable, then the individual would choose to work harder and vice versa.
The owners' equity for The Deer Store was $58,900 at the beginning of the year. During the year, the company had aftertax income of $4,200, of which $3,200 was paid in dividends. Also during the year, the company repurchased $6,500 of stock from one of the shareholders. What is the value of the owners' equity at year end?
Answer:
The owner's equity at the end of the year results to $64,400
Explanation:
We are able to calculate this through simple addition and subtraction
First we must view how much was payed through tax
t = 4,200 - 3,200 = 1,000
58,900 - 1,000 = 57,900
Than, due to the repurchase of $6,500 of stock, we must include this within our final equation
57,900 + 6,500 = 64,400
Hope this helps
Final answer:
To calculate The Deer Store's owners' equity at year-end, begin with the equity at the start of the year, add net income, and subtract dividends and stock repurchases. The ending owners' equity is $53,400 after accounting for all transactions.
Explanation:
The question asks to calculate the owners' equity for The Deer Store at the end of the year, based on given financial transactions. To find this, we must adjust the beginning equity by adding net income and subtracting both dividends paid and stock repurchase values. The calculation is as follows:
Beginning owners' equity: $58,900
Add: Aftertax income: $4,200
Subtract: Dividends paid: ($3,200)
Subtract: Stock repurchases: ($6,500)
Using simple arithmetic:
$58,900 (beginning equity) + $4,200 (income) - $3,200 (dividends) - $6,500 (repurchases) = $53,400 (ending owners' equity).
This calculation demonstrates how various financial transactions affect a company's equity over a fiscal period.
Which of the following refers to the collection, deployment, and interpretation of information that allows a business to acquire, develop, and retain its customers? A. Market intelligence system B. Neuromarketing C. Reverse-engineering D. Database E. Customer insights
Answer:
A
Explanation:
Market Intelligence System is a business analytics tool. What it does is that it analyses business data obtained from various sources- Customers, Competitors, supply chain, stores etc.
The data obtained is used to make necessary inferences all with an intent to retain, develop or acquire its customers.
A customer insight, or consumer insight on the other hand is an interpretation of trends in human behaviors which aims to increase the effectiveness of a product or service for the consumer, as well as increase sales for the financial benefit of those provisioning the product or service
Database is completely out of it as it is just a structured set of data held in a computer, especially one that is accessible in various ways.
Judge whether the following statement is true or false. One of the key player(s) that the financial manager works with is the auditing firm of the company. Together with the controller a financial manager works with the Auditing Company to insure that proper controls are in place for the economic activities of the firm. Auditors review the process of checks and balances within the company to insure that access to funds and information is appropriate and that financial transactions are recorded and reported in such a manner as to provide potential investors and current owners accurate information about the performance and condition of the company.
Answer:
True
Explanation:
One of the key roles of any manager is controlling the operations under his authority, and the two main tools that a financial manager has to help him/her control the operations under his/her department are the financial controller (internal auditor) and the external auditor firm. In an ideal world, the financial controller should be enough to do this job, but in the real world, things can get complicated and it is always better to have a different point of view. There is always the possibility that the financial controller is not performing his/her job properly, and the external auditor will help us notice this flaws.
Stewart grants Julie a security interest in 500 shares of stock in his company in exchange for a loan. Stewart makes his loan payments on time, and his business is growing and successful. When the loan is nearly repaid, Stewart is in a car accident and is unable to work for a few months. He could sell his company were it not encumbered by Julie's security interest. Julie: a. must abide by the original terms; once a financing statement is filed, it is permanent until it is fully paid according to the filing. b. may require Stewart to accelerate his payments because of her insecurity about his ability to pay her. c. may release her interest in the stock by filing an amendment. d. may request an accounting from Stewart.
Answer:
The answer is C. may release her interest in the stock by filing an amendment.
Explanation:
Sofia, a restaurant manager, has been observing and analyzing the work process of the cooks, servers, and bussers because she would like to increase their productivity of employees. Sofia is engaging in ____ management.
a. quantitative
b. contingency
c. systems
d. administrative
e. scientific
Answer:
E) scientific
Explanation:
Scientific management was developed by Frederick Taylor and is part of the classical management approach. The whole purpose of scientific management is to improve efficiency manly through time and motion studies.
The production processes are studied in order to determine what is the most efficient way of doing them. Sofia was analyzing her employees' tasks to see if their were doing them correctly and efficiently. The time and motion studies are used to reduce the time it takes to finish a task, and the faster a task is finished, more tasks can be done.
U.S.-based Centra Corporation is hesitant about entering into a licensing agreement with Fission, Inc., a company from another nation, due to the likelihood that Fission will break a contract or expropriate property rights. What specific type of risk is Centra Corporation trying to avoid?
Answer:
Legal Risk
Explanation:
Legal Risk refers to a type of damage to the company that can occurred due to an issue with the law.
In the excerpt above, we know that Centra corporation has the fear that Fission will break a contract or expropriate property rights..
- A break a contract is a for of issue with the law that could potentially make Central unable to obtain its fair share of profit from the operation
- Exporpriate Property right is a type of legal Risk that can occurs if the law in foreign country force the company to give the ownership of that peoperty right to the government.
The act that requires certain companies to set up confidential systems so that "red flags" can be raised about suspected illegal and unethical business practices is called the:_______
Answer:
Sarbanes–Oxley Act
Explanation:
Sarbanes – Oxley Act -
It refers to the act , which helps to save the investors , by improving the reliability and the accuracy of the corporate disclosures , is referred to as Sarbanes – Oxley Act .
It is also known as Corporate and Auditing Accountability, Responsibility, and Transparency Act , "Public Company Accounting Reform and Investor Protection Act" .
Hence , from the given information of the question ,
The correct option is Sarbanes–Oxley Act .
Jason is a marketing manager for a large breakfast cereal company. He knows that most people in China eat breakfast like everyone else in the world, but he also understands that they may not want the sugar-laden cereals his company is known for and he should consider promoting healthier cereal options instead. Jason is revealing cultural ________ as he makes his decision.
Answer:
cultural empathy
Explanation:
Cultural empathy -
It refers to the practice of appreciating and respecting all the cultures by their goods and services , is referred to as cultural empathy .
The people with cultural empathy tries to consider the similarity and differences between all the culture , and treat them with equal care and respect .
Hence , from the given scenario of the question,
The correct term is cultural empathy .
Prior to the 1997 federal tobacco settlement a pack of cigarettes sold for $2.48. The terms of the settlement required a decrease in teenage smoking of 60 percent. If the elasticity of cigarette demand for teenagers is about 1.3 then the price of cigarettes should rise to __________ in order to achieve the target reduction of 60 percent.
Answer:
$3.62
Explanation:
Elasticity of demand = percentage change in quantity demanded/ percentage change in price
1.3 = 60% / percentage change in price
Percentage change in price = 60/1.3
=46.15%
Price has to rise by 46.15% or 0.4615
0.4615 = (x - 2.48) / 2.48
1.14 = x - 2.48
X = 3.62
Price has to rise to $3.62 to achieve a 60% reduction.
I hope my answer helps you
Final answer:
To achieve a 60 percent reduction in teenage smoking with an elasticity of 1.3, cigarette prices should rise by approximately 46.15 percent, from $2.48 to about $3.62.
Explanation:
The question revolves around the concept of price elasticity of demand and how it affects consumption, particularly regarding teens' cigarette use. To achieve a 60 percent reduction in teenage smoking, the requirement can be translated into mathematical terms using the elasticity formula, which is percentage change in quantity demanded divided by percentage change in price. With an elasticity of 1.3, to reduce smoking by 60 percent, the formula implies that price must increase by 60 percent divided by 1.3 (the elasticity), resulting in approximately a 46.15 percent price increase.
Starting with the base price of $2.48, increasing it by 46.15 percent means adding about $1.14 to the original price. Therefore, the new price would be approximately $3.62 after rounding to the nearest cent.
A. calculate some key profitability, activity, leverage, liquidity and market ratios for apple and blackberry over time
Answer:
B. as they will have the same common business activity to their competitors
Explanation:
Gross Profit Margin = (Revenue – Cost of Goods Sold) / Revenue*100%
Net Profit Margin = PAT / Revenue * 100%
The EBITDA is calculated by adding back interest expense, taxes, depreciation & amortization expense to net profit or PAT. Then, the EBITDA margin is calculated by dividing the EBITDA by the sales revenue and is expressed in terms of percentage.
Lesley Torres is a project manager for the campaign "Action against Deforestation in Indonesia." She recently faced a glitch when the campaign could not be launched publicly according to schedule. Torres monitored the schedule to find the cause of the delay before speeding up the implementation process by allocating more members for the implementation phase. By doing this, which of the following functions is she performing?A) controlling B) formulating C) leading D) planning E) organizing
Answer: (A) Controlling
Explanation:
According to the given question, Lesley Torres is the project manager in an organization and she organized a campaign against the deforestation in the Indonesia.
She performing the controlling function by managing all the schedules and also implementing the given process.
The controlling is one of the main function in the management as it ensure all the activities performed accurately and also helps in planning all the activities in an organization. It basically helps in meet the desirable goals of the company by setting a standard performance.
Therefore, Option (A) is correct answer.
when the "invisible hand" guides economic activity, prices of products reflect______________.
a) only the costs to society of producing those products
b) both the values that society places on those products and the costs to society of producing those products
c) only the values that society places on those products
d) none of the above; when the "invisible hand" guides economic activity, prices of products are set by the government in a manner that is though to be "fair"
Answer:
b) both the values that society places on those products and the costs to society of producing those products
Explanation:
When the "invisible hand" guides economic activity, prices are known as equilibrium prices.
Equilibrium price is found where the demand curve intersects with the supply curve .
Equilibrium price is the price where both the value that society places on those products and the costs to society of producing those products are equal.
I hope my answer helps you
Delwazic Inc. is a multinational corporation (MNC) that creates products specialized for a few host countries. It manufactures berets in France, cowboy hats in the United States, bowlers in the United Kingdom, and bush hats in Australia. In this scenario, Delwazic Inc. is most likely a(n) ________.
Answer:
Delwazic Inc. is a multinational corporation (MNC) that creates products specialized for a few host countries. It manufactures berets in France, cowboy hats in the United States, bowlers in the United Kingdom, and bush hats in Australia. In this scenario, Delwazic Inc. is most likely a monopolist
Explanation:
A monopolist is solely responsible for sales of products to many buyers, such market is termed a monopoly market
McGinnis Construction is a cash-basis company with a fiscal year-end of June 30. McGinnis’ employees earn a normal weekly wage of $12,500 during a five-day work week. June 30 falls on a Thursday for the current year. McGinnis also performed services of $40,900 during the last four days of June, but they are not paid in full until July 8. As a result of operations, there will be an ________ of McGinnis’ net income for the most recent fiscal year of ________.
A. overstatement; $10,000.
B. understatement; $30,900.
C. overstatement; $30,900.
D. understatement; $40,900.
Answer:
correct option is B. understatement; $30,900
Explanation:
given data
normal weekly wage = $12,500
work = 5 day week
performed services = $40,900
solution
as here net income under cash basis will be nil
because here cash not receive till the July 8,
and here cash is paid to employee on July 1 which is Friday
so net income under an accrual basis for June month
and here revenue not yet received is $40,900
and salaries payable for last four days of June month will be as
salaries payable = [tex]12500* \frac{4}{5}[/tex]
salaries payable = $10000
so Net income as per accrual basis will be
Net income = $40,900 - $10000
Net income = $30,900
so here income under cash basis is understated
so correct option is B. understatement; $30,900
To guide cost allocation decisions, the ability to bear criterion ________.
A) is the primary criterion used in activity-based costing
B) allocates cost among the beneficiaries in proportion to the benefits each receives.
C) results in subsidizing products that are not profitable
D) is used more frequently than any other criteria
Answer:
the answer is D
Explanation:
Disagree. Cost accounting data plays a key role in many management planning and control decisions. The division president will be able to make better operating and strategy decisions by being involved in key decisions about cost pools and cost allocation bases. Such an understanding, for example, can help the division president evaluate the profitability of different customers The salary of a plant security guard would be a direct cost when the cost object is the security department of the plant. It would be an indirect cost when the cost object is a product. Exhibit 14-1 outlines four purposes for allocating costs:
1. To provide information for economic decisions.
2. To motivate managers and employees.
3. To justify costs or compute reimbursement.
4. To measure income and assets for reporting to external parties.
Exhibit 14-2 lists four criteria used to guide cost allocation decisions:
1. Cause and effect.
2. Benefits received.
3. Fairness or equity.
Ability to bear. The cause-and-effect criterion and the benefits-received criterion are the dominant criteria when the purpose of the allocation is related to the economic decision purpose or the motivation purpose. Using the levels approach introduced in Chapter 7, the salesvolume variance is a Level 2 variance. By sequencing through Level 3 (salesmix and salesquantity variances) and then Level 4 (marketsize and marketshare variances), managers can gain insight into the causes of a specific sales-volume variance caused by changes in the mix and quantity of the products sold as well as changes in market size and market share. The total salesmix variance arises from differences in the budgeted contribution margin of the actual and budgeted sales mix. The composite unit concept enables the effect of individual product changes to be summarized in a single intuitive number by using weights based on the mix of individual units in the actual and budgeted mix of products sold. A favorable salesquantity variance arises because the actual units of all products sold exceed the budgeted units of all products sold. The salesquantity variance can be decomposed into (a) a marketsize variance (because the actual total market size in units is different from the budgeted market size in units), and (b) a market share variance (because the actual market share of a company is different from the budgeted market share of a company). Both variances use the budgeted average contribution margin per unit.
Final answer:
The ability to bear criterion in cost allocation spreads costs in proportion to benefits received by each beneficiary. It contrasts with activity-based costing and aims for an equitable sharing of costs rather than strict alignment with activities. This contributes to efficient resource allocation that maximizes net benefits.
Explanation:
To guide cost allocation decisions, the ability to bear criterion allocates cost among the beneficiaries in proportion to the benefits each receives (Option B). This approach is based on the idea that the costs should be spread out according to the relative benefit or utility derived by each beneficiary. In contrast to activity-based costing, which seeks to align costs with the activities that generate them, the ability to bear approach may result in certain products being subsidized by more profitable ones.
Understanding how cost allocation works, including methodologies like the benefits-received principle in taxation, aids businesses in making equitable and efficient decisions. A cost/benefit analysis is a strategic tool that compares costs—money, effort, sacrifices—against gains like money, time, and experience, to inform decision-making processes. Equity and efficiency are critical in determining the fairness and effectiveness of cost allocation and the overall allocation of resources, as they aim to maximize net benefits.
Initial margin requirements are determined by:________
a. the Securities and Exchange Commission.
b. the Federal Reserve System.
c. the New York Stock Exchange.
d. B and C.
e. A and B
Answer:
b. the Federal Reserve System.
Explanation:
Initial margin refers to the deposit made by an investor with a broker, in order to open a margin account. The purpose of initial margin is security and collateral to ensure enough availability of cash in the trading account of the investor.
For instance an investor wants to purchase 4000 shares priced at 15$. In this case, he is supposed to deposit 50% of $60,000 i.e $30,000. The remaining $30,000 is contributed by the brokerage firm, regarded as borrowings on which the investor pays interest.
The initial margin limit is fixed by the Federal Reserve System.
A location analysis has been narrowed down to two locations, Akron and Boston. The main factors in the decision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labor cost, which has a weight of .10. The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should:
be indifferent between these locations
a.choose Akron
b.choose Boston
c.reject both locations
d.build a plant in both cities
Wendell interviews many middle-level managers and discovers that these individuals believe that external factors constrain managers' influence over outcomes. The mid-level managers have a(n) ________ view of management. Symbolic traditional standard omnipotent
Answer:
Correct option is Symbolic
Explanation:
Managers with symbolic view of management believes that success and failure of an organization is not completely in their control. There are external factors suppliers, creditors and customers that contribute to organizational success.
Managers who follow omnipotent view believes that they have full control over success and failure of the organization. Here, the middle-level managers have symbolic view of management.
There are several key elements that should be done when using performance information to identify potential problems, specifically where sales people need to improve for better performance in the future. Check ALL that should be done: a. evaluate salespeople against relevant performance criteria. b. compare salesperson evaluations to identify problem areas. c. investigate problem areas to identify causes of performance problems. d. report problem areas to top management. e. determine sales management actions to eliminate causes of future problems and to solve existing problems.
Answer: Performance Management strategies for Effective Sales Management
Explanation: All the answers given are correct for better performance and Sales management.
Mr. Liang, a wealthy businessman who made his fortune in the oil industry, understands the importance of a college education, so he has donated over $10 million over the last several years to colleges and universities. Mr. Liang's actions are an example of ___________.a. philanthropy.
b. sustainability.
c. servant leadership.
d. social responsibility
e. corporate governance.
Answer:A. Philanthropy
Explanation: Philanthropy is a private initiative aimed at the general good of the public, it is in contrast to the main main of business which is majorly to make profits.
Most philanthropic Organisation in the world help to better the lives of the community or environment where they are or the world at large.
Most philanthropist give out a part of their wealth in terms of money,ideas,resources to enhance and promote the public good.
Bessie is at the grocery store and is trying to remember some of the things she needs to buy. She is in the cleaning products aisle looking at the floor cleaning products. She's pretty sure she has another bottle left at home, so she doesn't purchase another. Bessie's perception of her current situation regarding this product reflects her ____.A. current stateB. desired stateC. actual stateD. self-conceptE. self-assessment
Answer:
C. Actual state
Explanation:
The perception consumers form of a product, affects their buying decision.
Desired state refers to in what way a consumer desires to satisfy his needs and wants.
The actual state of perception refers to how actually consumers satisfy their needs and wants.
In the given case, Bessie's actual state refers to an already satisfied need or want. In this case, the need for cleaning bottle has already been satisfied as has been perceived by Bessie at the grocery store.
This refers to the case of actual state of perception.
The use of index funds as investment vehicles for asset classes:_________
I. increases market risk
II. reduces market risk
III. increases the standard deviation of return
IV. reduces the standard deviation of return
Answer:
I & IV
Explanation:
Using index funds range as funding automobiles for asset instructions is I. will increase marketplace threat.
An index funds range is a type of investment car aiming to match the returns of a particular market index. investing in an index price range can help investors diversify a portfolio and build wealth at a low value.
Index funds Are Passive Investments Managers of actively managed mutual funds try and outperform a benchmark index. as an example, an actively managed fund that measures its performance in opposition to the S&P 500 could try to exceed the yearly returns of that index through diverse trading techniques.
Index funds are funding funds that observe a benchmark index, which includes the S&P 500 or the Nasdaq hundred. when you positioned money in an index fund, that money is then used to spend money on all the agencies that make up the precise index, which gives you a greater numerous portfolio than if you were shopping for personal stocks.
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Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $90,000,000 of five-year, 8% bonds at a market (effective) interest rate of 10%, with interest payable semi annually. Compute the following, presenting figures used in your computations.
a.The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibits 4 & 5. Round to the nearest dollar.
b.The amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round to the nearest dollar.
c.The amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round to the nearest dollar.
d.The amount of the bond interest expense for the first year.
Answer:
a) Proceeds $83,050,438.56
b) discount amortization(first payment)
83,050,438.56 x 0.05 = 4,152,521.93
- 90,000,000 x 0.04 = 3,600,000
amortization 552,512.93
ending carrying value
83,050,438.56 + 552,512.93 = 83,602,96
c) discount amortization(second payment)
83,602,96 x 0.05 = 4,180,148.02
less cash outlay of 3,600,000
amortization 580,148.02
d) total interest expense for the first year
4,152,521.93 June + 4,180,148.02 Dec = 8,332,669.95
Explanation:
We solve for the present value of the bond by discount the coupon payment and maturity at the market rate:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 3,600,000.000
time 10
rate 0.05
[tex]3600000 \times \frac{1-(1+0.05)^{-10} }{0.05} = PV\\[/tex]
PV $27,798,245.7451
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 90,000,000.00
time 10.00
rate 0.05
[tex]\frac{90000000}{(1 + 0.05)^{10} } = PV[/tex]
PV 55,252,192.82
PV c $27,798,245.7451
PV m $55,252,192.8187
Total $83,050,438.5637
"There is a house that a licensee from Firm A has been trying for several weeks to list for sale. The owners have been interviewing licensees from different firms. They tell A's licensee that Firm B will charge 2% less commission for selling the house. What should A's licensee say to the owner to get the listing?
Answer:
A provides excellent services to market their seller's properties.
Explanation:
The owner of the house has been exploring other options and got Firm B who are offering to sell the property for 2% less commission. In this case Firm A's only option is to highlight a competitive advantage they have over other firms and that is - they provide excellent service for marketing the seller's property.
Most times clients want results and can actually pay higher if there is a guarantee that a firm can deliver on the task assigned.
In the context of managerial accounting, the relevant information is information that
a. has been provided by the controller.
b. must be analyzed by the chief financial officer before being provided to managers.
c. must be provided in quantitative terms.
d. is information that will make a difference in the decision.
Answer:
d. is information that will make a difference in the decision.
Explanation:
In managerial accounting we have to work to make decision more easy thus, we cannot overflow with redundant or unncessary information. We have to only make use and present in our report information that will change the decision if presented.
For example, for freight cost the sales commision is not relevant.
The strategic planning process begins with _______. a. marketing objectives b. organizational mission and goals c. SWOT analysis d. finance objectives e. business-unit strategies
Answer:
b. organizational mission and goals
Explanation:
Strategic planning process has following sequence:
b. Organizational mission and goals
c. SWOT analysis
a. Marketing objectives
d. Finance objectives
e. Business-unit strategies
So according to above sequence the correct option is b. organizational mission and goals
The strategic planning process in business starts with identifying the organizational mission and goals. Other aspects like SWOT analysis, marketing and finance objectives follow afterwards.
The strategic planning process typically begins with identifying the organizational mission and goals. This step is crucial because it sets the direction for the entire strategic plan. The mission and goals give an overview of what the organization wants to achieve and offers a sense of direction to all its stakeholders. Following the establishment of organizational mission and goals, other steps such as SWOT analysis, setting marketing objectives, defining business-unit strategies, and finance objectives are undertaken.
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The outcomes of democratic leadership include:
a. Greater group satisfaction, commitment, and cohesiveness
b. More friendliness, mutual praise, and group-mindedness Less efficiency
c. All of the above
d. A and B only
Answer:
c. All of the above
Explanation:
Democratic leadership refers to the kind of leadership wherein the leader is open to constructive ideas from subordinates.
For example, while formulating policies which relate to workers working in the factory, the leader may discuss with workers and inquire of their views and suggestions.
This kind of leadership imbibes a sense of belonging among employees which acts as a motivation to work towards attainment of organizational goals.
At the same time such an activity would lead to a greater satisfaction in the group, better commitment and cohesiveness or synchronization of activities.
Also the environment turns more amiable with scope for mutual praise and group mindedness.
Price is a concept relating to how post-deregulation transportation firms determine and impose charges for their services. which is a distinguishing feature of this concept of price?
a. the amount found in a tariff book as payment to a carrier for performing a transport service
b. a lawful charge imposed by a carrier on a commodity movement
c. a value or level that is determined based on prevailing market forces
d. a charge determined primarily by considering a carrier's costs only
Answer:
The correct answer is option c.
Explanation:
The price of a product is the value of the product that is determined in the market through the working of the market forces. After deregulation, the price of any product or service such as transportation is determined in the market.
It is determined by the interaction of the demand for transportation and the supply of transportation.
The price elasticity of demand for Stork ice cream is - 4. Suppose you're told that following a price increase, quantity demanded fell by 10 percent. What was the percentage change in price that brought about this change in quantity demanded?
Answer:
40
Explanation:
10*4
The price elasticity of demand indicates how much the quantity demanded changes when there is a change in price. For Stork ice cream, a 10% decrease in quantity demanded implies a 2.5% increase in price, given its price elasticity of -4.
Explanation:The price elasticity of demand is a measure of how much the quantity demanded of a product changes when there is a change in its price. In this case, Stork ice cream has a price elasticity of demand of -4. This means that for every 1 percent increase in price, the quantity demanded falls by 4 percent. If the quantity demanded fell by 10 percent, this implies that the price of the Stork ice cream must have increased by 2.5 percent.
To find this, we can use the formula for price elasticity of demand: Percentage change in quantity demanded / Percentage change in price = -4. By transposing the equation, we can find that the Percentage change in price = Percentage change in quantity demanded / -4. Hence, -10% / -4 = 2.5%.
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