If income of a household rises by 10% and demand rises by 40% then income elasticity is equal to (а) 4 (b) 1 4 (c) 30 percent (d) None of the above
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- The discount for an automobile anti-theft mechanism installed in a motor vehicle insured for comprehensive coverage is 5% 10% Approved by the director of insurance Determined by the insurerIf value of output is $300 million, net value added at factor cost is $160 million, depreciation is $40 million, tax is $30 and subsidy is $10 Find intermediate consumptionA company produces and sells luxury goods and is able to control the demand for the product by varying the selling price. The relationship between price and demand is found to be: p=10-(42/D^2)+2Dwhere p is the price per unit in million dollars and D is the demand per year. The company is seeking to maximize its profit. The fixed cost is $59 million per year and the variable cost is $25 million per unit. The production capacity is 42 units per year, and the company produces at least 1 unit per month. 1) What is the company’s range of profitable output per year?
- A company produces and sells luxury goods and is able to control the demand for the product by varying the selling price. The relationship between price and demand is found to be: p=10-(42/D^2)+2Dwhere p is the price per unit in million dollars and D is the demand per year. The company is seeking to maximize its profit. The fixed cost is $59 million per year and the variable cost is $25 million per unit. The production capacity is 42 units per year, and the company produces at least 1 unit per month.a) Derive how to find the number of units that should be produced annually to maximize profit.b) What is the maximum profit per year?c) What is the annual breakeven point?d)What is the company’s range of profitable output per year?Production capacity of neck process. There are two alternatives, a and B. The annual fixed cost of scheme a is US $40000 and that of scheme B is US $30000; the unit variable cost of scheme a is US $10 / piece and that of scheme B is US $11 / piece. Revenue can be realized for each piece 15 $ 1Calculate the break even point of the two schemes. 2What kind of output can the two schemes achieve the same profit? 3) If the annual demand is expected to be 12000 units, which option can achieve higher profits?Currently, the exchange rate is 100 yen per dollar. InJapan, we sell a product that costs $5 to produce for 700yen. The product has an elasticity of 3. For exchange ratesvarying from 70 to 130 yen per dollar, determine the optimalproduct price in Japan and the profit in dollars. Assume alinear demand curve. Current demand is assumed to equal100.
- Agnes, a General Manager in XXX Company, estimated a multiplicative demand function of the form: using a cross-section data collected in the company sales on 30th June, 2019. The estimation results are as follows: Constant Price(P) Income (I) Price of other Good (Po) Estimated coefficient 0.022 -0.223 1.354 0.133 Standard Error 0.012 0.056 0.502 0.814 t-statistic (1.19) (-3.98) -2.69 -0.13 Number of Observations, n=210; R-squared= 0.7516 Critical Students t=1.96 at 5% Level of Significance Write down the estimated demand equation Interpret the coefficients and value Describe any three managerial decisions that can be applied by the manager from the estimated demand function6) When the toll for a bridge crossing increased from $2 to $2.50; the daily volume decreased from 30,000 to 26250 vehicles per day. Determine the optimum toll and the maximum daily revenue.A firm plans to begin production of a new product. The manager must decide whether to buy the product from a contractor at $19 a piece or to produce them in house. There are two alternative processes that could be used for in-house production: Process 1 has a (annualized) fixed cost of $ 150,000 and a variable cost of $16 per unit. Process 2 has a (annualized) fixed cost of $ 80,000 and a variable cost of $17 per unit. The product sells for $20 per unit. Determine the range of demand for which the manager would choose each option as the best option.
- 1) The standards for a product call for 2.5 pounds of a raw material that costs $6.10 per pound. Last month, 30,000 pounds of the raw material were purchased for $187,500. The actual output of the month was 9,000 units of the product. A total of 22,200 pounds of the raw material were used to produce this output. Required: a. What is the materials price variance for the month? b. What is the materials quantity variance for the month?Short Grass Incorporated is a distributor of golf balls. Martin's Golf Supplies is a local retail outlet which sells golf balls. Martin's purchases the golf balls from Short Grass Incorporated at $1.15 per ball; the golf balls are shipped in cartons of 72. Short Grass Incorporated pays all incoming freight, and Martin's Golf Supplies does not inspect the balls due to Short Grass' reputation for high quality. Annual demand is 159,520 golf balls at a rate of 3,691 balls per week. Martin's Golf Supplies earns 10% on its cash investments. The purchaseminus−order lead time is one week. The following cost data are available: Relevant ordering costs per purchase order $132.00 Carrying costs per carton per year: Relevant insurance, materials handling, $0.87 breakage, etc., per year What is the economic order quantity? (Round costs to the nearest cent and quantities to the nearest whole number.)A small countertop installing company hires you to estimate their customers weekly demand function for marble (per sq ft). The demand function is as follows: Qm=5000-30Pm +20Pg + 0.05Inc m=marble, g= granite, inc = avg disposable income for home improvements in the surrounding area. Current prices: marble = 40, granite = 25 and disposible income = 5000 Suppose during the supply change shortage the price of marble triples to $120 Determine the elasticity of demand at the new market price for marble