Suppose the price of salt increases by 25 percent and, as a result, the quantity of pepper demanded (holding the price of pepper constant) increases by 4 percent. The cross-price elasticity of demand between salt and pepper is nothing. (Enter your response rounded to two decimal places and include a minus sign if appropriate.) In this example, salt and pepper are ▼ substitutes not related complements . Instead, suppose salt and pepper were complements. If so, then the cross-price elasticity of demand between salt and pepper would be A. negative. B. zero. C. positive. D. greater than 1. E. greater than minus1.
Answers
Answer:
Option (C)
Explanation:
As per the data given in the question,
Price of salt increases by = 25%
Quantity of pepper demanded increases by = 4%
Cross price elasticity = Quantity of demand increases ÷ Price of salt increases
= 4% ÷ 25%
=0.16
Hence Cross-price elasticity of demand between salt and pepper would be positive.
So option (C) is answer
Final answer:
The cross-price elasticity of demand between salt and pepper determines whether they are substitutes or complements. If the cross-price elasticity is zero, they are substitutes. If it is negative, they are complements.
Explanation:
In this scenario, the cross-price elasticity of demand between salt and pepper is zero, indicating that they are not related complements. If salt and pepper were complements, the cross-price elasticity of demand between them would be negative. This means that as the price of one product increases, the quantity demanded of the other product would decrease.
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Related Questions
Gallardo Co. is involved in a lawsuit as a result of an accident that took place September 5, 2017. The lawsuit was filed on November 1, 2017 and claims damages of $1,000,000. (a) At December 31, 2017, Gallardo's attorneys feel it is remote that Gallardo will lose the lawsuit. How should the company account for the effects of the lawsuit? (b) Assume instead that a December 31, 2017, Gallardo's attorney feel it is probable that Gallardo will lose the lawsuit and be required to pay $1,000,000. How should the company account for this lawsuit? (c) Assume instead that at December 31, 2017, Gallardo's attorneys feel it is reasonably possible that Gallardo could lose the lawsuit and be required to pay $1,000,000. How should the company account for this lawsuit?
Colter Steel has $5,600,000 in assets. Temporary current assets $ 3,200,000 Permanent current assets 1,610,000 Fixed assets 790,000 Total assets $ 5,600,000 Short-term rates are 10 percent. Long-term rates are 15 percent. Earnings before interest and taxes are $1,180,000. The tax rate is 20 percent. If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be
The widespread acceptance that bacteria causes diseases helped lead to a public health movement in the late nineteenth and early twentieth centuries. This movement eventually brought sewers, clean drinking water, and garbage removal to all U.S. cities. The public health movement in the United States in the late nineteenth and early twentieth centuries was like a technological advance to the country's production possibilities, since both ____________ expanded secured the economy's productive capacity, the former by increasing the nation's ________ degree of sophistication effective workforce .
Suppose GDP in this country is $900 million. Enter the amount for consumption. National Income Account Value (Millions of dollars) Government Purchases ( G ) 250 Taxes minus Transfer Payments ( T ) 325 Consumption ( C ) Investment ( I )
2. Does the pattern of variances suggest that the company’s managers have been making trade-offs? Explain.
Answers
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
1. Direct Material Price is
= Actual Quantity × (Standard Rate - Actual Rate)
= 1,780,000 × ($1.40 - $1.30)
= 1,780,000 × 0.10
= $178,000 Favorable
Direct Material Quantity Variance is
= Standard Rate × (Standard Quantity - Actual Quantity)
= $1.40 × [(210,000 × 8) - 1,780,000]
= $1.40 × (1,680,000 - 1,780,000)
= $1.40 × -100,000
= -$140,000 Unfavorable
Direct Labor Rate Variance is
= Actual Hour × (Standard Rate - Actual Rate)
= 4,900 hours × ($12 - $13)
= -4,900 hours × $1
= -$4,900 Unfavorable
Direct Labor Efficiency Variance is
= Standard Rate × (Standard Hours - Actual Hours)
= $12 × [(210,000 × 0.024) - 4,900]
= $12 × [5,040 - 4,900]
= $12 × 140 hour
= $1,680 Favorable
2. As we can see that the material price variance and labor efficiency variance comes in favorable while on the other side, the material quantity variance and labor rate variance comes in unfavorable.
And we assume that the managers are purchasing the materials efficiently at lesser rates and the usage is not efficient.
Consequently , labor is efficient if the company paid at higher rate.
Therefore the managers are making trade offs.
Moreover, they are compromising of labor rate so that there would be rise in efficiency.
And at the same time if cheaper material is buyed so the quality is compromised and the changes of wastage is high that reflects the material quantity variance unfavorable
Answers
Answer:
$995.00
Explanation:
Calculation for how much money will she have in her account in 11 years
Using this formula
Future Value = Present Value + Present Value * Interest Rate ×Time Period
Let plug in the formula
Future Value = $500 + $500 ×0.09 × 11
Future Value =$500+$495
Future Value = $995.00
Therefore the amount of money she will have in her account in 11 years will be $995.00
Final answer:
Emma will have $995 in her savings account after 11 years with a fixed interest rate of 9%.
Explanation:
To calculate how much money Emma will have in her savings account after 11 years with a fixed interest rate of 9%, we can use the formula:
Future Value = Principal + (Principal * Interest Rate * Time)
Substituting the values, we get:
Future Value = $500 + ($500 * 0.09 * 11) = $500 + $495 = $995
Therefore, Emma will have $995 in her account after 11 years.
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Answers
Answer:
a) 5.45%
b) 6.98%
Explanation:
We are given the following information in the question:
Mean, μ = 0.8%
Standard Deviation, σ = 2%
We are given that the distribution of profit is a bell shaped distribution that is a normal distribution.
Formula:
a) We have to find the value of x such that the probability is 0.99
P(X < x)
Calculation the value from standard normal z table, we have,
Thus, 5.45% of assets does the company need to be 99% sure that it will have a positive equity at the end of the year.
b) We have to find the value of x such that the probability is 0.999
P(X < x)
Calculation the value from standard normal z table, we have,
Thus, 6.98% of assets does the company need to be 99% sure that it will have a positive equity at the end of the year.
Answers
Answer:
Given this change in the cost, the adequacy and quality of the estimated cost drivers and costs used by the system will determine the costing results for SR6 under the new system.
Explanation:
A cost driver can be described as the unit of an activity or any factor that makes the cost of an activity to fluctuate. An estimated cost driver is adequate and of the expected quality when quality or quantity is satisfactory or acceptable.
Therefore, given this change in the cost, the adequacy and quality of the estimated cost drivers and costs used by the system will determine the costing results for SR6 under the new system.
Final answer:
Cannady has transitioned from a traditional to an Activity-Based Costing system, which uses three cost drivers. As a result, the cost of manufacturing SR6 rose from $168 to $178 per unit due to the more accurately distributed costs.
Explanation:
In this context, Cannady's move from a traditional cost system using a single cost driver to an Activity-Based Costing (ABC) system that uses three cost drivers resulted in a change in the unit cost of their SR6 product. The new price reflects a more accurate calculation of the costs incurred in producing SR6.
In a traditional cost system, overhead costs are simply divided by the total number of units produced using one cost driver. With the ABC system, costs are allocated based on the actual activities that consume resources, making the costs more accurate. Therefore, the unit cost of SR6 increased from $168.00 to $178.00 under the new system as the costs were more accurately allocated under the ABC system.
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Answers
Answer:
Explanation:
Journal entry
a. Dr Cash 100750
Cr Capital- Kacy spade 100750
(Investment in company)
b. Dr Office supplies 1250
Cr Cash 1250
(to purchase office supplies on cash)
c. Dr Office equipment 10050
Cr Accounts payable 10050
( To record purchase of office equipment)
d. Dr Cash 15500
Cr Service fee income 15500
( To record service provided to customer)
e. Dr Accounts payable 10050
Cr Cash 10050
( To record payment of office equipment purchase)
f. Dr Account receivable 2700
Cr Service revenue 2700
(To record service revenue)
g. Dr Rent expense 1225
Cr Cash 1225
( To record rent expense on cash)
h. Dr Cash 1125
Dr Account receivable 1125
( To record partial collection of receivable )
i. 1) Dr Retained earning 10000
Cr Dividend payable 10000
( To record dividend yet to be to shareholder )
2.) Dr Dividend payable 10000
Cr cash 10000
( To record Payment of cash dividend)
Cash capital-kacy spade
Dr____________Cr___ ___ DR ___________Cr
100750 --- 1250 --100750
15500 ---10050
---1225
1125-- 10000
Office supplies Office equipment
Dr ____________Cr__ __ Dr _____________Cr
1250-- 10050---
Accounts payable Service fee income
Dr_____________Cr_ __ Dr ___________Cr_
10050 ---- 10050 ---- 10050
---2700
Service revenue Account receivable
Dr_____________Cr__ _ Dr ______________Cr
-- 2700----1125
rent expense retained earning
Dr____________Cr__ _ Dr __________Cr__
1225-- 10000 ---- 10000
Dividend payable
Dr_______________Cr
10000 --- 10000
Trial Balance
Cash 94850 100750 Capital-Kacy spade
Salary expense
Rent expense 1225 Account payable
Office Equipment 10050 Retained earning
Prepaid insurance 12750 Service revenue
office supplies 1250 Dividend payable
Account receivable 1575
total 108950 = 108950
Answers
Answer:
1,040
Explanation:
The Herfindahl index is an index that is used to measure the size of firms in relation to the industry and it also shows the level of competition among the firms in the industry. The Herfindahl index is also known as Herfindahl–Hirschman Index (HHI).
The Herfindahl index is calculated by summing the square of the market share of all firms in the industry. For this question, it can be calculated as follows:
Herfindahl index = (12^2 * 5) + (8^2 * 5) = 720 + 320 = 1,040.