Calculating arc price elasticity of demand Arc Price Elasticity. Assume that amazon.com cut the price on a 1.10 ct Princess Cut Diamond Solitaire engagement ring from $4,500 to $2,500, and sales rose from 50 to 75 units per week. A.…
Helen gets smart and realizes that she is the only pie shop around. Calculate the marginal revenue she gets for each additional sale as the change in total revenue (price times sales). Graph this and show the new quantity of…
Cross price-elasticity, Income elasticity A. Calculate the cross-price elasticity of demand coefficient of a firm’s product X, given that a 5% increase in the price of its close substitute, product Y, causes the quantity demand of product X to increase…
Viera Corporation is considering investing in a new facility. The estimated cost of the facility is $2,045,000. It will be used for 12 years, then sold for $716,000. The facility will generate annual cash inflows of $400,000 and will need…
Calculate the income elasticity of demand for product X when I= $30. How could we classify product X? Do you consider commodity X a cyclical or non cyclical good? Explain why. Do you consider product X a luxury good or…
Suppose the Robinson Company had a cost of goods sold of $1, 000,000 in 2010 and $1, 200,000 in 2011. a. Calculate the inventory turnover for each year. Comment on your findings. b. What would have been the amount of…
H & W were married and filed jointly. They had one child age 4. During the current year, W had a salary of $77,000 and made interest income of $100. W made (paid) a contribution to a regular IRA of…
A large manufacturer of truck and car tires recently changed its cost-flow assumption method for inventories at the beginning of 2010. The manufacturer has been in operation for almost 40 years, and for the last decade, it has reported moderate…
Jamestown Ltd balance of non-current assets total was $7.5 million at 1 January 2016 and closing balance was $6.4 million at 31 December 2016. These balances do not have accumulated depreciation deducted. Current period depreciation expense was $975,000. Opening balance…
a) Referring to Table bellow, calculate the market value of firm L (firm a corporate income tax) if the equity amount in its capital structure decreases to $3000 and the debt amount increases to $3000. b) For firm L (with…
