Answer:
Option (B) is correct.
Explanation:
Given that,
Percentage increase in price = 5%
Percentage decrease in quantity demanded = 15%
Therefore,
= 3.0
Hence, elasticity of demand facing Billy Bob's Barber Shop is 3.0
Answer: Please refer to Explanation.
Explanation:
Monopoly.
The 2 reasons why the monopoly’s marginal revenue will always be less than its price are;
a) Even though Monopolies have very large influence on the prices of goods and services they offer, for a Monopoly to sell more goods, they generally have to lower their prices. This will lead to a situation where Marginal Revenue, which is the additional revenue made per additional unit sold will be less than Price because additional revenue for a new unit will be less than the last one because prices are dropped .
b) A Monopoly's demand schedule is downward sloping. This means that demand rises as prices drop. As prices drop therefore, more goods will be sold but the marginal revenue will be less because prices had to be dropped to get an additional unit to be sold. That unit therefore will bring in less revenue than the last unit.
Perfectly Competitive Market
In such a market, the seller is a Price Taker. This means that sellers in this market do not sell at a price that they want but rather at a price the market has established to be the Equilibrium. This is because of the high competition in the market. Since they are all selling at the same price, this means that every additional revenue they get is the same as the price the market charges. This means that Price equals Marginal Revenue in this market.
Answer:
A sunk cost is the correct answer to this question.
Explanation:
Sunk cost:- Sunk costs are those expenses that have been accumulated in the past and are thus in some way unrelated to judgment-making.
In the question referred to above, the company has already made $14 to produce. This cost will be inconsequential even if the company makes the units as it is or procedures them further.
As a result, $14 is a sunk expense.
Other options are incorrect because they are not related to the given scenario.
Answer:
Explanation:
A) using 2-year moving average :
Year 6 : (3800 + 3700) = 7500 / 2 = 3750
2) Mean absolute deviation based on the forecast above :
(3000 + 4000) = 7000/2 = 3500
(4000 + 3400) = 7400/2 = 3700
(3400 + 3800) = 7200/2 = 3600
3000
4000
3400 __3500__100
3800__3700__100
3700__3600__100
Mean absolute deviation = (100 + 100 + 100) /3 = 300/3 = 100
C) weight of 0.4 and 0.6
(0.4*3000 + 0.6*4000) = 3600
(0.4*4000 + 0.6*3400) = 3640
(0.4*3400 + 0.6*3800) = 3640
3000
4000
3400 __3600__200
3800__3640__160
3700__3640__60
(200 + 160 + 60) = 420 / 3 = 140
