Answer:
$1
Explanation:
We can use the simple consumer surplus formula:
Consumer surplus = Maximum Price Willing to Pay - Actual Price
For Bob
Consumer Surplus = $10 - $8
= $2
For Lisa
Consumer Surplus = $7-8
= $-1
So, the total consumer surplus is $1
Answer:
Added
Explanation:
For determining the amount of raw material to be purchased, the following things need to be adjusted
1. The raw material needed - Added
2. Ending inventory - Added
3. Beginning inventory - Deduct
In mathematically,
Purchase of raw material = Raw material needed to meet production + ending inventory of raw material - beginning inventory of raw material
Hence, it should be added to desired ending inventory
Basically I don’t know the answer but it wants me to put something
Answer:
The net gain or loss in the future market is $105000
Explanation:
Total Future contracts = 20
Total bushel in 1 contract = 5000
Total quantity of wheat = 20 * 5000 = 100,000 bushel
In Cash Market
Break-even price = $ 7.00
Spot price in September = $ 8.40
Therefore company will make a loss here since spot price is greater than break-even price.
Total Loss = (breakeven - spot price) * Quantity
Total loss = (7 - 8.40) * 100000
= $ - 140,000
In future market
Forward contract price = $ 5.95
Spot price in September = $ 8.40
Here company will make a profit because actual buy price is $ 5.95 and spot price is $ 8.40
Total profit = (Spot price - forward price) * Quantity
= (8.40 - 5.95) * 10000
= $ 245000
Net profit/loss = Profit/Loss in cash maket + Profit/loss in futures market
= $ - 140000 + $ 245000
= $ 105000
The overall purpose of differentiation is letter e, to create superior customer value. It is because differentiation is being defined as a way of making products to be more appealing or attractive in means of using unique qualities that may be of the customer's taste in a way of creating customer value.
