BUSINESS HIGH SCHOOL

In which of the following situations will total revenue increase? A. price elasticity of demand is 1.2 and the price of the good decreases
B. price elasticity of demand is 3.0 and the price of the good decreases
C. price elasticity of demand is 0.5 and the price of the good increases
D. all of the above

Answers

Answer 1

Answer:

Answer:

Option D

All of the above

Explanation:

Price elasticity of demand is given as

Price elasticity of demand = % change in quantity demanded/ % change in price.

Change in quantity demanded will definitely lead to an increase in total revenue. Hence the formula can be revised to become:

Change in quantity demanded = Price elasticity of demand X % Change in price

Option A : If Price elasticity of demand is 1.2 and the price of the good decreases.

This will cause an increase in total revenue since we will be dividing by a reducing denominator

Option B: price elasticity of demand is 3.0 and the price of the good decreases:

This will cause an increase in total revenue since we will be dividing by a reducing denominator

Option C: price elasticity of demand is 0.5 and the price of the good increases:

This is a case of inelastic demand since price elasticity is < 1. In inelastic demand, the price of the good does not affect the change in demand significantly. This is the case of essential goods. Hence, the total revenue will still increase.

Answer 2

Answer:

Answer:

A. price elasticity of demand is 1.2 and the price of the good decreases

Explanation:

Price elasticity of demand refers to the relationship change that occurs in the price for goods and the quantity demanded, the relationship change have an impact the business total revenue.

Revenue is the amount of money a business firm make from the sales of goods and services, it is the total number of units sold multiplied by the price per unit, and as the price or the quantity sold changes, the revenue also changes. Total revenue is the amount or price of an item multiplied by the number of units sold.

When demand is elastic at a given price level, the firm cut its price, this is because the percentage decrease in price will result in an even larger percentage increase in the quantity sold, therefore raising the total revenue.

Changes that are occurs are:

if the Price elasticity of demand is inelastic i.e less than 1 and a firm increases its price, the total revenue increases.

if the Price elasticity of demand is elastic i.e greater than 1 and a firm decreses its price, the total revenue increases.

if the Price elasticity of demand is elastic i.e greater than 1, and a firm increases its price, the total revenue decreases.

Related Questions

One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold to a consumer in a grocery store for $2.00. Taking these three transactions into account, what is the effect on GDP?a.GDP increases by $2.00.b.GDP increases by $3.00.c.GDP increases by $5.00.d.GDP increases by $6.00.
Shawn went to a restaurant where the beer was mediocre and the place was run-down. The restaurant was out of many of its more popular menu items. Yet Shawn remembered the restaurant fondly because he had dinner with the girl he would end up dating steadily. They really hit it off that night. A few months later he decides to return to the restaurant, only to find that he was disappointed in the food and service. He thinks it's strange because he had such a good experience last time. What situational factor likely influenced Shawn's first experience?a. reason for purchaseb. buyer mood or conditionc. social surroundingsd. time considerationse. physical surroundings
______objects which can produce their own light are known asâ€‹
Job order costing and process costing are a.cost flow systems b.inventory tracking systems c.cost accounting systems d.pricing systems
According to the principle of comparative advantage, worldwide output and consumption will be higher when nations specialize in the production of those goods and services a. they can provide at a lower opportunity costs. b. that employ the most domestic workers. c. that will increase their foreign exchange rate by the largest amount. d. for which their consumption taxes are lowest.

Which country backs bitcoin as currency??

Answers

Bitcoin is a cryptocurrency and a known payment system or currency in the internet. The top ten countries that supports Bitcoin as a payment are Estonia, United States, Denmark, Sweden, South Korea, The Netherlands, Finland, Canada, United Kingdom and Australia.

NZMA stock is currently selling for $128. Which of the following options is "in-the-money"? March 130 call March 125 put February 100 put February 125 call

Answers

Answer:

February 125 call

Explanation:

Because, the expression "in the money" means to a situation when the market price of the asset is higher than the strike price for a call or lower than the strike price for a put. The correct answer is the only option that reach this feature

Theoretically, what would happen if a nation had an unlimited supply of a certain resource? Why

Answers

the would sell it.because it ould bring in money.

What is a written description of a new business venture that describes all aspects of the business?

Answers

The answer to the questions is Business Plan. It is a written formal statement that outlines the business goals, the reason why the goals are attainable and how it can be attained. It may also provide the organization's background information.

If the Fed lowers the reserve requirement, what will happen? (Select the best answer.) Group of answer choices Banks will be able to give out more loans. People will have less spending power. Banks will make changes to the fees they charge customers. The money supply will grow more slowly.

Answers

Answer:

Banks will be able to give out more loans

Explanation:

The Fed demands banks to maintain a percentage of their deposits as reserves. Reserves are meant to stay within the bank's strongroom to cater for unexpected withdrawals. The banks cannot loan out that money.

Should the Fed lower the reserve requirements, the banks will have more money lend. The proposition of deposits available to issue out as loans will increase.

The Fed influences the level of reserves to direct economic growth. Should the economy be slowing down, the Fed discourages the banks from holding high levels of reserves. Holding low reserves encourages banks to lend to households and businesses, which stimulates economic growth.

howard lumber company mistakenly classified a product cost as an expense that totaled $20,500. the company produced 2,050 units of product and sold 1,025 of them during the year. management is paid a bonus equal to 2% of net income. in the year in which the mistake was made:

Answers

The mistaken classification of the product costas an expense would result in an understatement of the cost of goods sold by $20,500. This would also lead to an overstatement of the net income by the same amount.

To calculate the correct net income for the year, we need to deduct $20,500 from the reported net income.

The cost per unit of the product would be $20,500 divided by 2,050 units, which is $10 per unit.

The cost of goods sold would be 1,025 units sold multiplied by $10 cost per unit, which is $10,250.

Therefore, the corrected net income would be the reported net income minus $20,500, which is the mistaken expense, minus $10,250, which is the corrected cost of goods sold.

If the bonus paid to management is based on net income, then the mistaken classification would have led to a higher bonus payment. The corrected net income would result in a lower bonus payment by 2% of the difference between the reported and corrected net income.

Learn more about Net income: brainly.com/question/28390284

#SPJ11

Other Questions

A corporate manager chafes under red tape and bureaucratic regulations until finally deciding to start a separate business. The apparent reward he seeks is _________.a. the satisfaction of working with people. b. a satisfying way of life. c. community service. d. independence.

On March 1, a firm paid $1,800,000 cash to purchase land on which to construct a new facility. Construction began the same day. Total expenditures incurred for construction were as follows: The new facility was finished and ready for use on July 1. To finance the building construction, the firm borrowed $2,400,000 on March 1 on a 9%, 3-year note payable. Other than the construction note, the firm’s only other outstanding debt during the year was a $1 million, 12%, 6-year note payable dated January 1. If the weighted-average accumulated expenditures for the construction project were $2,900,000, then what amount of interest cost should the firm capitalize for the year?

I need help to determine my grade

Harlose Suits faced a lot of complaints from customers when its recent batch of goods was dispatched. The employees at Harlose Suits, hence, had to rework on the returned items, and in some cases, the company had to even replace the faulty goods. In this case, the costs incurred by Harlose Suits are an example of _____. a. prevention costs b. internal failure costs c. external failure costs d. appraisal costs