All categories

1 year ago

The reason the substitution effect works to encourage a consumer to buy less of a product when its price increases is:

Business

1 answer:

ikadub [295]1 year ago

8 0

Answer:

The correct answer is the option C: the product is now relatively more expensive than it was before.

Explanation:

To begin with, the substitution effect is the term that, in economics, refers to the situation where a products or services increase or decrease its value in comparison with other and therefore it causes a substitution from the consumer regarding that change in the price.

Secondly, in the case where a product increases its price the substitution effect will cause that the consumer decides to purchase other products due to the fact that the first product is now relatively more expensive than it was before and therefore a substitution of the good takes place.

You might be interested in

Chiller Company has credit sales of $5.60 million for year 2013. Chiller estimates that 1.32% of the credit sales will not be co

dsp73

Answer:

$59,045.80

Explanation:

The following information was missing:

Accounts Receivable total $1,565,170

Assuming the company uses the percent of accounts receivable method, what is the amount that Chiller will enter as the Bad Debt Expense in the December 31 adjusting journal entry?

total uncollectible debt = $1,565,170 x 4% = $62,606.80

since the account balance of the allowance for doubtful accounts is $3,561 (credit), the adjusting entry should be:

December 31, 2013, bad debt expense

Dr Bad debt expense (= $62,606.80 - $3,561) 59,045.80

Cr Allowance for doubtful accounts 59,045.80

7 0

2 years ago

If Dominion Bank also pays 3.25% annual interest, compounded daily. If you had the following deposits and withdrawals, calculate

dimaraw [331]

Answer:

It would have earned 15.91 dollars of interest

Explanation:

We will calcualte for compounding at each moment:

First, we will calculate for $6,500 for March 1st to March 15th:

Then, from March 16th to march 27th we calculate for $5,000 + accrued interest of the peri

and from March 28th to 31th we calcualte $5,700 + accrued interest

$Principal (1 + \frac{r}{m} )^{n \times m} = Amount$

n = 15/365 days

m = 365

r = 0.0325

$6,500 (1 + \frac{0.0325}{365} )^{15/365 \times 365} = Amount$

6508.69

Then we withdraw 1,500

And we calcualte for hte period marchth to March 27th for the currnet value: 5,008.69

$5,008.69 (1 + \frac{0.0325}{365} )^{11/365 \times 365} = Amount$

Amount: 5,013.60

Then we deposit 700 and calcualte the rest of the month:

$5,713.60 (1 + \frac{0.0325}{365} )^{11/365 \times 365} = Amount$

Amount: 5,715.64

We can now calcualtethe interest earned:

6,508.96 - 6,500 = 8.96

5,013.60 - 5,008.69 = 4.91

5,715.64 - 5,713.60 = 2.04

total interest = 15.91

5 0

1 year ago

Denmark Corporation's variance report for the purchasing department reports 1,000 units of material A purchased and 2,400 units

Nadusha1986 [10]

Answer:

Total material price variance= $380 favorable

Explanation:

Giving the following information:

Material A:

Purchase= 1,000 units

Purchase price= $2.1

Standard price= $2

Material B:

Purchase= 2,400 units

Purchase price= $2.8

Standard price= $3

To calculate the total material price variance, we need to use the following formula on each material:

Direct material price variance= (standard price - actual price)*actual quantity

Material A:

Direct material price variance= (2 -2.1)*1,000

Direct material price variance= $100 unfavorable

Material B:

Direct material price variance= (3 - 2.8)*2,400

Direct material price variance= $480 favorable

Total material price variance= -100 + 480

Total material price variance= $380 favorable

3 0

2 years ago

Under Fisher, between 1993-1997, Kodak moved closer to customers when it produced and launched a digital print station to retail

ehidna [41]

Answer:

b. Forward integration.

Explanation:

Forward integration: is a type of marketing strategy where the company directly distribute or supply its product to the retailer, this is done so as to be to sell directly to the retailer without going through the wholesaler. This is achieved by having warehouses that is closer to the retailers where the products can be sold to the retailers or directly selling the product to the retailer from the company.

6 0

2 years ago

Read 2 more answers

Provide an argument of why an organization should design and implement a Benefits Plan that complements its overall corporate vi

Katyanochek1 [597]

Explanation:

A corporate benefits plan is used as a relevant tool for the company to prepare for business and organize itself more strategically in the market.

For example, an employee benefit plan can offer several additional advantages that justify the company's mission and values of exercising corporate governance that prioritize the well-being of its employees. By offering advantages such as a health plan, the company consequently increases the incentive to work, motivates employees and becomes an attractive strategy for attracting good professionals in the market.

8 0

2 years ago