The following are market demand and supply equations for a perfume product: Qo = 70 – 4P Qs = 10 + 2P where P is, Qo and Qsare quantity demanded and supplied of perfume, respectively. A) What is the equilibrium price and quantity? Calculate using the arithmetic method. B) Draw demand and supply curves for prices £0, £4, £6 ... £16. C) Suppose consumers' income increases and perfume is considered as a normal good. As a result, the new demand equation is Qo = 100 - 4P. Find the new equilibrium price and quantity of perfume. D) Your economist friend told you that because of the change in demand described in part (c), price elasticity of demand changed. Is your friend right? Explain. E) Use the demand equation in part (c) to compute price elasticity of demand between £5 and £6. Use the mid-point (arc) method.

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Financial Statements

Financial statements (or financial reports) are the formal records of the financial activities that are undertaken by a firm. They are convenient instruments used for analyzing a company’s financial position and performance. Financial ratios are created with the help of the numerical values that are derived from the financial statements. They give meaningful information about the financial performance of the company.