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 <em>substitution effect</em> 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

What makes data mining an important business tool? What types of information does data mining produce? In what type of circumsta

Vinil7 [7]

Explanation:

Data mining is a technique in data analysis that allows users determine faster and one of the strategic business intelligence techniques. Data mining enables users to analyze large amounts of data and to identify hidden links within data not known otherwise.

For example, data mining might reveal that a consumer buying product X is ten times as likely to buy the product

Data mining finds information such as:

Relationships, or events related to a single event.

Events or patterns linked over time.
Category or patterns that define the category to which an article refers, discovered through an analysis of current classified objects and the application of a set of rules.
Unclassified or connected clusters;
Clusters, or unclassified but related groups

Whether hunting at new products and services or seeking new marketing strategies or new markets, I would suggest to a company that uses data mining. Data mining can be useful if unforeseen business issues whose sources are hard to identify are being studied.

8 0

1 year ago

Read 2 more answers

Wendy Epstein, a sales representative, earns an annual salary of $29,500 and receives a commission on that portion of her annual

Likurg_2 [28]

Answer:

a. Regular annual salary = $29,500

b. Sales commission = $13,750

c. Total annual earnings = $43,250

Explanation:

a. Regular annual salary is constant and fixed = $29,500

b. Sales commission for sales above $150,000 to $200,000 = 8.5%

On sales above $200,000 Sales commission = 10%

Actual Sales for the year = $295,000

Sales Commission

= $200,000 - $150,000 = $50,000 $\times$ 8.5% = $4,250

+ $295,000 - $200,000 = $95,000 $\times$ 10% = $9,500

Total commission = $4,250 + $9,500 = $13,750

c. Total annual earnings = Annual salary + Total commission

= $29,500 + $13,750 = $43,250

Final Answer

a. Regular annual salary = $29,500

b. Sales commission = $13,750

c. Total annual earnings = $43,250

7 0

2 years ago

In the Business Loan worksheet, enter the data values and formulas required to calculate the monthly payment on a business loan

Pavlova-9 [17]

Answer:

Monthly Payment: $1,879

Annual Payment: $13,975

Explanation:

To find the answer, we will use the present value of an annuity formula:

The formula is:

PV = A (1 - (1 + i)^-n) / i

Where:

PV = Present value of the investment (in this case, of the loan)
A = Value of the annuity (will be our incognita)
i = interest rate
n = number of compounding periods

The reason why we use this formula is because both the annual payments, and the monthly payments are annuities: payments that have regular time intervals, and have the same interest rate, which means that the value of each payment is the same.

To find the monthly payment, we first convert the annual interest rate of 6.2% to a monthly rate. The result is a 0.5% monthly rate.

Next, the number of compounding periods changes, because the monthly rate compounds each month, not once every year. For these reason, we use the number of months that there are in 15 years, which is 180 months (15 x 12 = 180).

Third, we divide the interest rate by 100 to obtain the decimal value: 0.5 / 100 = 0.005

Finally, we plug the correct amounts into the formula:

225,000 = X (1 - (1 + 0.005)^-180) / 0.005

225,000 = X (118.5)

225,000 / 118.5 = X

1,899 = X

Now, for the annual payment, we simply use the annual rate of 6.2% (divided by 100) instead of the monthly rate, and the compounding periods are now 15 years, instead of 180 months:

225,000 = X (1 - (1 + 0.062)^-15 / 0.062

225,000 = X (16.1)

225,000 / 16.1 = X

13,975 = X

4 0

2 years ago

You are auditing Rodgers and Company. You are aware of a potential loss due to noncompliance with environmental regulations. Man

aniked [119]

Answer:

D. disclose a liability and provide a range of outcomes.

Explanation:

As there are 40% chances to the outcome that liability will occur, it is not nominal to be ignored. And therefore, it shall be shown in the balance sheet, as a note, with different possibilities and their expected results.

As the amount attached is huge and that the company shall not ignore such a coming liability, as if it do not happen, it can be reversed, and if it does the company shall be ready to have the liability in case of any default.

4 0

2 years ago

On July 16, 2019, Logan acquires land and a building for $500,000 to use in his sole proprietorship. Of the purchase price, $400

stellarik [79]

Answer and Explanation:

The computation is shown below:

a) The adjusted basis for the land and the building at the acquisition date is

Land = $100,000

Building = $400,000

We recognized the purchase price of land and building

b. And, the adjusted basis for the land and the building at the end of 2019 is

Land = $100,000

Building is

= $400,000 - $4,708

= $395,292

We considered the cost recovery for the computation above

4 0

2 years ago