answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Rus_ich [418]
2 years ago
6

The Acmeville Metropolitan Bus Service currently charges $0.77 for an all-day ticket, and has an average of 472 riders a day. Th

e bus company is not earning a profit, but according to their contract with the city, they cannot cut the number of buses on the road. They must therefore find a way to increase revenues. The bus company is considering increasing the ticket price to $ 0.99 . The marketing department's studies indicate this price increase would reduce usage to 195 riders per day. Calculate the absolute value of the price elasticity of demand for bus tickets using the simple percentage change method. Round your answer to one decimal place.
Business
1 answer:
german2 years ago
3 0

Answer:

price elasticity of demand = -2.05, price elastic, or in absolute terms 2.05, price elastic

Explanation:

the formula to calculate price elasticity of demand is:

PED = % change in quantity / % change in price

  • % change in quantity = [(195 - 472) / 472] x 100 = -58.69%
  • % change in price = [($0.99 - $0.77) / $0.77] x 100 = 28.57%

PED = -58.69% / 28.57% = -2.05

Generally when we calculate PED we use absolute values, i.e. this PED = 2.05. When PED > 1, price elastic, which means that any change in price will result in a larger change in quantity demanded. When PED < 1, price inelastic, which means that any change in price will result in a smaller change in quantity demanded. When PED = 1, unit elastic, which means that any change in price will result in a proportional and inverse change in quantity demanded.

You might be interested in
Which of the following statements about decomposition is the least true? Decomposition involves structuring and organizing the W
kari74 [83]

Answer:

Decomposition subdivides the major deliverables into smaller components.  It is a tool and technique of the Create WBS process and is isued to create a WBS.  

Level two components might be deliverables, phases, subprojets, or some combination

5 0
2 years ago
You are the payables accountant for a medium sized electrical contracting company. You are paying bills with purchase discounts
son4ous [18]

Answer:

Memo

To: The Finance Manager

From: The Payables Accountant

Subject: Bank Loan to Pay Suppliers

Date: October 5, 2020

The above subject on our previous discussion refers.

This memo clarifies the advantage of borrowing from our bank the sum of $100,000 in order to offset the account of our supplier who has offered us the trade terms of 2/10, n/30.

Recall that the bank loan's interest rate is 6% per annum.  If we borrow within the month and repay 30 days after, the interest cost will be $500 ($100,000 * 6%/12).

You can compare this to the discount we shall receive from the supplier totaling $2,000 ($100,000 * 2%).  We can even extend the bank loan to 2 months, thereby paying a total interest cost of $1,000 ($500 * 2).

The implication is that we shall be making some gains by taking advantage of the cash discount.  May you approve the loan based on this clarifications.

Regards,

Tony Ohagwam

Explanation:

This memorandum attempts to justify the request for a bank loan in order to settle the bill of one of our company's suppliers.  It demonstrates the huge financial benefits that are implicit in accepting cash discounts from suppliers.

4 0
2 years ago
Baker Company owns 15% of the common stock of Charlie Corporation and used the fair-value method to account for this investment.
solniwko [45]

Answer:

the income that recognized on this investment is $10,500

Explanation:

The computation of the income recognized on this investment for the year 2021 is shown below"

= dividend × share of ownership

while

The dividend is $70,000

And, the share of ownership is 15%

Now place these values to the above formula

= $70,000 × 15%

= $10,500

hence, the income that recognized on this investment is $10,500

3 0
2 years ago
Fiori Corporation's relevant range of activity is 4,700 units to 11,500 units. When it produces and sells 8,100 units, its avera
Snezhnost [94]

Answer:

$12.6

Explanation:

Calculation for incremental manufacturing cost

The incremental manufacturing cost will be the addition of the following :

Direct materials $ 6.50

Direct labor $ 3.90

Variable manufacturing overhead $ 2.20

Incremental manufacturing cost $12.60

Therefore incremental manufacturing cost will be $12.60

8 0
2 years ago
A restauranteur spends $61 on labor and materials to produce 8 meals . By increasing these cost to $78 , he can produce 14 meals
Mademuasel [1]
He has to have negative marginal returns. I hope this helps :)
3 0
2 years ago
Read 2 more answers
Other questions:
  • Chris bought 10 shares of Apex Company for $25 each, and later sold all of them at $45 each. This transaction resulted in what t
    14·2 answers
  • A streaming music site changed its format to focus on previously unreleased music from rising artists. the site manager now want
    12·1 answer
  • Which of the following illustrates a tradeoff​? A. Randy enjoys ski vacations. B. I will study for my exam instead of going to t
    15·1 answer
  • Seth Hernandez is sitting in a class that precedes lunch. His stomach begins to rumble and grumble. Instead of thinking about th
    9·1 answer
  • Dylan Corporation issues for cash $2,000,000 of 8%, 15-year bonds, interest payable annually, at a time when the market rate of
    15·1 answer
  • On January 1, 20X9, Pitcher Corporation purchased 100 percent of Softball's stock. All tangible assets had a remaining economic
    12·1 answer
  • Provide a brief explanation of why depreciation of capital assets is considered in determining potential net income from an inve
    5·1 answer
  • Ask Socrates Inc. is a computer software company that employs highly intelligent, but somewhat unusual people. Every Friday, fre
    14·1 answer
  • The relationship between financial leverage and profitability   Pelican​ Paper, Inc., and Timberland​ Forest, Inc., are rivals i
    6·1 answer
  • Why should you avoid the use of sarcasm , cliches, and idioms in business letters?
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!