Answer: I found the options:
A. The current ratio includes assets other than cash.
B. A high current ratio may indicate inadequate inventory on hand.
C. The two companies may define working capital in differentterms.
D. A high current ratio may indicate inefficient use of various assetsand liabilities.
Explanation: The correct answer is "D. A high current ratio may indicate inefficient use of various assets and liabilities."
Is invalid to assume that the company with the higher current ratio is te better company because a high current ratio may indicate inefficient use of various assets and liabilities, That is why it would be convenient to observe other ratios that can help us compare more fully the 2 companies.
Final answer:
Assuming that a company with a higher current ratio is better is invalid because current ratios do not tell the whole financial story. Context, industry standards, and financial trends must be taken into account for accurate financial statement analysis. Other financial ratios and benchmarks should also be considered when assessing a company's financial health.
Explanation:
In comparing the current ratios of two companies, it is invalid to assume that the company with the higher current ratio is the better company because the current ratio does not represent the full financial story of a company. Financial statement analysis is more complex and ratios must be interpreted in context, taking into account trends, industry standards, and unique company circumstances. A higher current ratio might indicate good short-term financial position, but it doesn't necessarily reflect profitability, efficiency, or the appropriateness of asset management.
Additionally, different industries have different operational models and capital needs, which can affect how the current ratio should be interpreted. It's also important to consider factors such as the quality of receivables, inventory levels, and the company's debt structure. In some cases, a high current ratio can suggest that a company is holding too much inventory or not efficiently using its working capital.
When analyzing a company's financial health, other ratios and measures, such as the quick ratio, debt-to-equity ratio, and return on assets, should be considered alongside the current ratio. Moreover, it is essential to look at historical data and industry benchmarks to gain a proper understanding of financial standing.
The __________ - method of tax reporting provides more flexibility to time income and deductions by accelerating or deferring payments
Answer:
The Cash Method
Explanation:
The cash accounting method records income when cash is received and expenses incurred in cash. As the basis of accounting, income is deducted when expenses are deducted regardless of the alternative method of accounting for income items when it is earned.
Two main advantages of the cash method of calculation:
(1) The cash method comes with faster or delaying payments and gives businesses more flexibility in terms of withdrawals
(2) ease of bookkeeping in accounting.
The company you work for is considering moving its email server to a hosting company. This will help reduce the cost of hardware and server administration at your local site. Which document formally states the reliability and recourse if reliability isn’t met?
Answer: Server level agreement (SLA)
Explanation:
An SLA is an agreement between the service provider and its client. This ensures that quality, service, reliability and resources are met. SLA binds the service provider to honor the agreement.
Answer:
A Service Level Agreement
Explanation:
The Service Level Agreement is a document that clear states and lays out the criteria for the level of servcie a supplier is to provide to a consumer. The SLA contains laid out metrices to ensure that suceh services can be assessed in order to either penalize deviations or allow for remedies should in case, the service level expected is not met. It can be between various departments in an organisation ro between various organisations.
In case of the question, the SLA is a document that specifies the level of service the company is to expect from the hosting company. The SLA formally states the level of reliability the client should expect and the penalties or remedies to be expected if such reliabilitis are not met.
The total demand for money is the sum of the transactions demand plus the ____________ demand for money.
The total demand for money includes the sum of the transactions demand and the speculative demand for money. M1 and M2 are monetary aggregates that measure the total amount of money available in an economy for these transactions.
Explanation:The total demand for money is the sum of the transactions demand plus the speculative demand for money. The transactions demand is the money needed to carry out the everyday transactions. On the other hand, the speculative demand for money is the money that people choose to hold as a form of financial investment, when they expect changes in interest rates, or when there are uncertainties in the market.
The total amount of money in an economy that can carry out transactions is typically measured by the monetary aggregate M1 or M2. M1 includes coins, currency in circulation, and checkable or demand deposits. M2 includes M1 as well as other types of deposits such as savings deposits and time deposits.
Moreover, the demand for financial capital (money) also represents groups that are borrowing the money, including businesses that need to borrow to finance their investments and the federal government when it runs a budget deficit.
Refer to Scenario 15.1. The campaign was so successful that Rick decided to host a special event to announce the winner. On the day of the event he invited the media to film the event. The CEO of the firm named the finalists and then called out the winner. This all occurred with much fanfare. An illustration of the proposed product with a short description was provided to reporters to publish in the paper. This campaign is an example of _____________________.
Answer: Public relations
Explanation: Public relations is the technique of maintaining the dissemination of information deliberately between an individual or group of individuals and the citizenry.
Public relations may include a company or person that uses subjects of public interest and media articles that do not involve direct payment to be exposed to their audiences.
In The given case, Rick was intentionally using media sources for making people aware and interested towards his project. Hence we can conclude that the given case is an example of public relations.
As the "central bank" for the United States the _________________ is the primary manager of the money supply.
a. U.S. Mint
b. Bureau of Engraving
c. U.S.Treasury
d. Federal Reserve
e. Federal Reserve
Answer: (D) Federal reserve
Explanation:
In the united states, the federal reserve is basically created by the congress in the year 1913 for providing the financial system and also the stable monetary and it is basically refers as the central banking system.
According to the question, the federal reserve is works as the primary manager in the form of Central bank in the united state for the purpose of money supply.
The main function of the federal reserve is that it basically regulated the financial institutions and also managing the nation's economy and the interest rate. Therefore, Option (D) is correct.
In the circular flow of economic activity, there are two kinds of markets in which firms and households interact. In the factor market:___________
Answer: Goods and the services are exchanged
Explanation:
The circular flow of the economical activity is refers to the various types of economical relationship in the market economy and the money and the wages are the form which is basically used for purchasing the products and the services.
In the given factor market the various types of products and the services are get exchange by the interaction of organization and the household. It is also helps for calculating the specific national income.
Therefore, Goods and the services are exchanged is the correct answer.
Erin works at a financial institution. She has offered a housing loan to a customer. While carrying out the transaction, which legal responsibility should she address?
A.
arrange an informal meeting with the customer
B.
organize a success party for the department
C.
disclose all confidential information about the organization to the customer
D.
ensure that she credits the loan amount accurately to the customer’s account
E.
show the customer a list of people who defaulted on similar loans
Answer:
D. ensure that she credits the loan amount accurately to the customer’s account
Explanation:
Erin needs to address this legal responsibility, and "arranging an informal meeting with the customer" is not a legal responsibility. Similarly, C is not a legal responsibility, and in fact, it is a crime. And E is not a legal responsibility. These details are not being given at the time of sanctioning the loan. However, D is certainly a legal responsibility as Erin needs to ensure that she credits the loan amount accurately to the customer's account.
what type of consideration does the proposed insured offer to an insurance company?
Answer:
the payment of the insurance premiums
Explanation:
Consideration in contract law refers to an exchange of something of value, e.g. I pay $5 in exchange for a hamburger.
In insurance contracts, consideration provided by the insured refers to paying the insurance premium. Consideration provided by the insurance company is the promise to pay in case of a covered loss.
The type of consideration offered by the proposed insured to an insurance company is payment of the insurance premium.
What is a consideration?A payment made by one party to another in exchange for the transfer of something of value is referred to as consideration. Consideration can take the form of property payment, obligation settlement, or forbearance. It must be valuable to both parties involved in a transaction. A contract can be declared invalid if valuable consideration is not included. Consideration should be measurable. Thus, an offer of money in exchange for services rendered is regarded as a valid form of consideration, whereas a promise of increased affection in exchange for a service is not quantifiable and thus is not regarded as a valid form of consideration.
A consideration is a promise of something of value made by a promisor in exchange for something of value made by a promise; the thing of value is typically goods, money, or an act. Consideration is the concept of value offered and accepted by individuals or organizations entering into contracts. Consideration can be anything of value promised by one party to the other when making a contract.
What is an insurance premium?An insurance premium is the amount of money paid by an individual or business for an insurance policy. Premium for policies covering healthcare, auto, home, and life insurance are paid. The premium is income for the insurance company once it is earned. It also represents a liability because the insurer is required to provide coverage for claims made against the policy. If an individual or a business fails to pay the premium, the policy may be cancelled.
When you purchase an insurance policy, your insurer will assess a premium. This is the cost of the insurance policy. Policyholders can pay their insurance premiums in a variety of ways. Some insurers allow policyholders to pay the insurance premium in monthly or semi-annual instalments, whereas others may require a full upfront payment before any coverage begins.
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All of the following are exempt transactions under the Uniform Securities Act EXCEPT non-issuer transactions in stocks listed on the:
A. American Stock Exchange (NYSE American)
B. Toronto Stock Exchange
C. Mexico City Stock Exchange
D. NASDAQ Stock Market
Answer: C. Mexico City Stock Exchange
Explanation:
According to the regulatory authority, SECP (securities and exchange commission), has states an Act whereby the Mexico City Stock Exchange is not exempt from non-issuer transactions in stocks listed.
The correct answer is C: Mexico City Stock Exchange. It is not exempt under the Uniform Securities Act for non-issuer transactions, unlike stocks listed on national exchanges such as NYSE American and NASDAQ.
Under the Uniform Securities Act, certain transactions are considered exempt, meaning they do not require registration. One example of an exempt transaction is a non-issuer transaction in stocks listed on a national securities exchange such as the American Stock Exchange (NYSE American) or the NASDAQ Stock Market.
However, stocks listed on international exchanges, such as the Toronto Stock Exchange or the Mexico City Stock Exchange, are not included in these exemptions.
Common stockholders have a residual claim to income, in other words they are last in line.
A) True
B) False
Answer: True
Explanation: In simple words, common stock holders refers to the individuals who have the ownership rights of the company in form of common stocks or generally termed as equity shares.
These stockholders gets dividend in return of their investment. They usually receive the highest dividend among all of them but their rate is not fixed as preference shareholders and debt holders.
These shareholders are considered as the owners of the company due to their voting rights and thus have last preference in event of liquidation and receives the residual left after paying for the creditors such as debt holders and preference holders.
Although the lines are blurring, the "many-to-many" media transmission function is largely the domain of ___.
Answer: digital content transmitted online.
Explanation: This is a new type of communication that allows users to communicate with large audiences online simultaneously. This is done using social media platforms. This is often done in 2 ways: a platform where the audience can watch and react in real time, or a platform where the audience can only watch and listen. During a many - to - many transmission, of the people participating, each individual can post a message and each individual can receive the message. An example of this on social media right now is Instagram live.
Alfred Zeien, former chairman of Gillette, once noted that his company's Parker Pen unit does not have to develop a special model for Malaysia and Singapore because shoppers worldwide seek the same things when buying a gift that will serve the recipient as a status symbol. This insight relates to which level of Maslow's hierarchy of needs?
a. physiologicalb. safetyc. sociald. esteeme. self-actualization
Answer: esteem needs
Explanation: The need for trust relates to the need for respect, self-esteem, and self-confidence. The need for esteem is the basis for the human desire that others must accept and appreciate.
In our lives, we engage in activities that give us a sense of accomplishment, whether personally or as passions. It can cause issues with self-esteem and inferiority if you are unable to satisfy your confidence needs.
In the given case, the company knows that everyone shares gifts with the intention of being appreciated by others. Hence we can conclude that the given case depicts esteem needs.
Final answer:
Alfred Zeien's observation about Parker Pen's global appeal aligns with the esteem level on Maslow's hierarchy of needs, which encompasses the desire for respect, status, and recognition.
Explanation:
Alfred Zeien's insight about the Parker Pen unit not needing to develop a special model for Malaysia and Singapore because shoppers worldwide seek the same things in a status-symbol gift relates to esteem in Maslow's hierarchy of needs.
Esteem needs refer to the human desire for acceptance, respect, and valued by others, which is fulfilled by the ownership of prestigious products or symbols of success. Such products convey a certain status and hence cater to the esteem level of needs on Maslow's hierarchy.
Jana has offered to conduct a card-sort to help with user testing for your company’s new website. What is Jana hoping to determine with a card-sort?
Answer:
Your Site's Navigation
Explanation:
Card sorting is one such technique that has been used for many years due to its reliability and effectiveness
Card sorting is a method used to help design or evaluate the information architecture of a site. In a card sorting session, participants organize topics into categories that make sense to them and they may also help us to label these groups. To conduct a card sort, we can use actual cards, pieces of paper, or one of several online card-sorting software tools.
When a firm is overly dependent on one or more products or markets, and the intensity of rivalry in that market is intense, the firm may wish to ____ by making an acquisition. a. broaden its competitive scope b. increase its economies of scale c. overcome entry barriers d. increase new product speed to market
Answer: broaden its competitive scope
Explanation: An organization's competitive scope is characterized as a feature of the number of value chains in which the enterprise is involved. The involvement in these stages in these stages is separate but interconnected.
In the given case, the company runs in an industry which have heavy competition. Thus, that enterprise should broaden their customer base by making acquisition or mergers so that they can have extra resources to compete with their rivals efficiently.
Competitive scope can be categorized as segment scope, vertical scope, geographical scope and industry scope.
The rise in unemployment that occurs because of a recession is known as cyclical unemployment, because it is closely tied to the ______________.
Answer:
Business cycle
Explanation:
Cyclical unemployment is when employment level changes with the business cycles. Unemployment increases when there's a downturn in the economy and reduces when there's an upturn in the economy.
During downturns, firms demand for labour falls and unemployment increases.
During a boom, firms demand for labour increases and unemployment falls.
I hope my answer helps you
Cyclical unemployment refers to the rising rate of unemployment during a recession due to the impact on the labor demand curve and wage stickiness. Government policy can alleviate cyclical unemployment by stimulating overall buying power.
Explanation:The rise in unemployment that occurs as a result of a recession is known as cyclical unemployment.
This phenomenon is closely tied to the economic cycle. During a recession, the overall state of the economy affects the labor demand curve and due to stickiness in wage reductions, rates of unemployment rise. The unemployment rate tends to drop during economic expansions.
Cyclical unemployment is usually a short-term problem. Government intervention, such as fiscal policy geared towards stimulating overall buying power, could be used to alleviate the issue and thus, reduce cyclical unemployment by making firms more eager to hire.
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Foster enters into an agreement with Grab n' Eat Burgers, Inc., to operate a franchise in Home Town. Later, Grab n' Eat grants franchises to others within the same territory, causing Foster to suffer a significant loss in profits. In Foster's suit against Grab n' Eat, Foster's best argument is that the franchisor
a. violated the implied covenant of good faith and fair dealing.
b. charged Foster a franchise fee.
c. violated the antitrust laws.
d. granted Foster the first Grab n' Eat franchise in Home Town
Answer:
a.
Explanation:
Based on the information provided within the question it can be said that Foster's best argument is that the franchiser violated the implied covenant of good faith and fair dealing. This covenant is a presumed agreement that both parties that enter a contract will be honest, fair, and will conduct everything in good faith. Which Grab n' Eat has not done since they purposely granted franchises to others in the same area knowing the negative effect it would have on Foster.
The correct choice is A. Foster's best argument is that Grab n' Eat violated the implied covenant of good faith and fair dealing by granting additional franchises in his territory, causing significant financial loss.
The correct choice is A . Foster's strongest argument in a lawsuit against Grab n' Eat Burgers, Inc., is that the franchisor violated the implied covenant of good faith and fair dealing. This covenant is an obligation inherent in all contracts, ensuring that both parties act honestly and fairly toward one another. If Grab n' Eat granted additional franchises in Foster's territory without consideration of Foster's interests and potential profit losses, it can be seen as an act of bad faith which breached their agreement.
Hunt Company purchased factory equipment with an invoice price of $90,000 on Jan 1. Other costs incurred were freight costs, $1,100; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500; fire insurance policy covering equipment, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 8-year useful service life. Instructions
(a) Compute the acquisition cost of the equipment. Clearly identify each element of cost.
(b) If the double-declining-balance method of depreciation was used, show the journal entry to record depreciation expense for the first fiscal year on Dec.31.
Answer:
(a) $94,000
(b) 25%
Explanation:
Given:
Part (A)
Invoice price = $90,000
Freight cost = $1,100
installation wiring and foundation = $2,200
testing cost = $700
total acquisition cost = 90000+1100+2200+700 = $94,000
Part (B)
1/8 * 2 = 0.25 or 25%Productivity at the Michigan branch of Brite Paper Manufacturing has decreased significantly over the last twelve months. Aiden, the branch manager, researches the problem and finds that many employees are spending significant time on social media while at work. He wants to construct a report for the company's leadership team, using the deductive approach. How should he structure the report?
Answer:
Declare the primary message. Then give supporting arguments and the conclude with a call to action.
Ownership concentration is determined by both:________ a. the number of outside directors and total percentage of shares they own. b. the number of stockholders and the parties they represent. c. the number of stockholders and total percentage of shares they own. d. the number of outside directors and the parties they represent.
Answer:
b.
Explanation:
Ownership concentration refers to the internal governance mechanism where the owners of the company/firm/business (shareholders) can control and thus influence the direction that the company takes in order to protect their own interests. Therefore the ownership concentration is determined by both the number of stockholders and the parties they represent.
Ownership concentration refers to the number of shareholders and the total percentage of shares they own in a firm. The governance structure of a company helps ensure it's run in the best interest of the shareholders. However, in practice, top executives often have a significant role in choosing board member candidates.
Explanation:Ownership concentration in a firm is determined by the number of shareholders and the total percentage of shares they own (option c). For instance, in a public company, the firm is owned by shareholders who buy and sell stock. These shareholders, who can number in the thousands or even millions, elect a board of directors to manage the firm. The more stock a shareholder owns, the more votes they have in electing the board of directors.
It's important to note that the company's governance structure ensures the firm is run in the interest of the shareholders (the true owners). However, the top executives usually have a significant role in choosing the candidates for the board members. This is largely because most shareholders may not have sufficient knowledge or incentives to nominate alternative board members themselves.
While we have talked about public companies, it's worth mentioning that private companies can also have concentrated ownership. These are often owned and run by individuals or a group.
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The Legislative Redistricting Board of Texas is ex officio. This means that its members have a position on the board automatically because they
Answer:
Hold other public office
Explanation:
The main purpose of Legislative restricted board is to make and initiate plans of legislative if the legislature fails to make the desired plans in the first secession. Overall, the members are elected carefully who show ethnic and social characteristics. The members have a position on the board automatically because they hold another public office. Any individual who holds another public office is automatically elected for a position.
What is the head term in the title "Official guide to creating a mobile marketing strategy in 2019"?
Answer:
Mobile Marketing
Explanation:
Mobile marketing strategy is a digital marketing strategy which satisfy the needs of mobile devices users e.g smartphones and tablets. For these mobile devices, contents like websites, MMS, emails, messages mare framed to give them an excellent user experience. The size and user interface of a mobile phone is small compared to desktop. So that has to be in consideration when trying to offer any solution to meet their needs. Adverts of products are uploaded on sites where users visits regularly. It is different from the traditional post bill board, posters, flyers and cards.
Still images, catchy phrases, and graphic animations are used to attract the attention of users. These will make them to want to click further thereby making them potential buyers of such products and services.
Mobile marketing is important to business because mobile users are increasing daily and yearly. Majority of what a desktop can do ,can be replicated on a mobile device.
Final answer:
The head term in the title is "mobile marketing strategy," indicating the main focus of the content. It is important for targeting the content to the proper audience and creating a successful search strategy for optimal SEO placement.
Explanation:
The head term in the title "Official guide to creating a mobile marketing strategy in 2019" refers to the primary keyword or phrase that the content is focused on. In this case, the head term can be identified as "mobile marketing strategy." This term indicates the subject matter and the core focus of the content, which can be described as a guide designed to help businesses or individuals create an effective plan for marketing on mobile platforms in the year 2019. By using such a specific head term, the content can target an audience interested in learning about current best practices and considerations for mobile marketing within a global market context. Furthermore, ensuring the right subject headings and keywords are used is essential for creating a successful search strategy that positions content effectively within search engine results.
Anthony picked up a package of paper plates and noticed that there was a coupon stuck onto the package that stated, "Save 50 cents now!" When he went to the checkout, the cashier removed the coupon and gave him the 50 cent discount.
Which type of coupon did Anthony receive?
a. on-pack coupon
b. in-pack coupon
c. online coupon
d. shelf-delivered coupon
e. instantly redeemable coupon
Answer:
e. instantly redeemable coupon
Explanation:
Instantly redeemable coupon -
It is the type of coupon , which is provided along with the goods or services , the person opt for , is referred to as instantly redeemable coupon.
This coupon , can be applied easily at the time of purchase and hence can avail the given discount.
These coupons are given , in order to attract more customers and increase the production.
_____________ Theory considers that fluctuations in economic activity are due to changes in effective demand (Aggregate Demand)a) classicalb) marxianc) say'sd) keynesian
Keynesian Theory considers that fluctuations in economic activity are due to changes in effective demand
Option "D"
Explanation:
The theory of overall economic expenditure and impacts on output and inflation is the Keynesian economics.
Throughout the 1930s, Keynesian economics was founded in an effort to understand the Great recession by the British theorist John Maynard Keynes. In order to encourage demand and to draw out the global economy of anxiety, Keynes advocated increased government spending and lower taxes.
Keynesian theoreticians say this process is broken, so market growth is more erratic and vulnerable to extreme fluctuation. Without interference. Keep low-interest rates is an effort to encourage companies and people to borrow more money in order to encourage the business cycle. Borrowing is allowed to often increase expenditure for companies and individuals. These new expenditure boost the economy.
If you involve students in writing rules, you must leave classroom policies to their discretion.A) TrueB) False
Answer:
B) False
Explanation:
Students must have liberty to express his/her thought and their input is very valuable, however, rules need to followed by everyone and teachers should have ultimate authority in classroom to maintain decoram of classrrom. School´s rules and procedure must be incorporated into the classroom management system as well. There are certain behaviours that is forbidden in classroom or any part of school campus. Adminstrative procedure need to be controlled during classes.
Find the selling price of the following item.
A stereo costing $125.39 and marked up $76.00.
a)1.65 b) 49.39 c) 125.39 d) 201.39
Answer:
d) 201.39
Explanation:
Selling price = Cost price + mark-up
in this case: $ 125.39 + $79 = 201.39
Answer:
201.39
Explanation:
odessey ware
Annette is currently in the 25% marginal tax bracket. She had a long-term capital gain from the sale of stock and another capital gain from a coin collection. Assuming that the combined gains are not large enough to push her into a higher marginal bracket, she will be taxed _____% on the gain from the sale of stock and _____% on the gain from the coin collection.
Answer:
Annette's long term capital gains are taxed at 15% rate.
Short term capital gains are taxed as gross income, therefore Annette will be taxed at 25% rate.
Explanation:
Capital gains are taxed at 0%, 15% or 20%, depending on your taxable income and filing status. Most taxpayers fall under the 15% rate (yearly income between $39,376 to $434,550). Since Annette's current tax bracket is 25% (should be 24% instead) her income is between $84,201 to $160,725, so she also falls under the 15% long term capital gains tax rate.
Two construction companies, Dakota and Carolina, are in the construction business. Each owns a tract of land being held for development, but each company believes that the other's land is better suited to enhance the success of each planned development. Accordingly, they agree to exchange their land and have the following information:
Dakota's Carolina's
Land Land
Cost and book value $400,000 $250,000
Fair value based upon appraisal $500,000 $450,000
The exchange of land was made, and based on the difference in appraised fair value, Carolina paid $50,000 cash to Dakota.
Refer to Exhibit 10-1. After the exchange, Dakota should record its newly acquired land on its books at
a. $400,000
b. $300,000
c. $500,000
d. $450,000
Answer:
d. $450,000
Explanation:
Land of both Dakota and Carolina will be recorded on fair value rather than their cost or book value in their books.
Dakota will record Land at $500,000 and
Carolina will record Land at $450,000
On Exchange Dakota will get $50,000 as cash and Land valued on $450,000
So Dakota will record its newly acquired land in its books on fair value i.e $450,000
American settlers angered Mexican officials by refusing to convert to Catholicism and violating the Mexican ban on ____________.
Answer:
slavery
Explanation:
American settlers angered Mexican officials by refusing to convert to Catholicism and violating the Mexican ban on slavery.
American settlers feel angry for mexian official because they reject to shift toward Catholicism and also refuse the Mexian ban on slavery.
Whirlwind Financial Corporation sends its executives to a resort in Mexico-at taxpayer's expense-to consider using the firm's cash to buy back its stock and thereby prop up the value. Many of its competitors are doing the same thing. One of the best ways to learn about the ethical responsibilities inherent in operating a business is to look at the mistakes made by other companies.True / False.
Answer:
True
Explanation:
The best way to learn about ethical responsabilities is using the events that happen before with other companies, on special when we talk about ethical responsabilities we have dilemmas that sometimes are hard to approach and identify the right way to do the right thing. Many of the dilemmas are related to others (employees, suppliers, customers) and in general the society around any company. And is so important learn about the mistakes analyzing previous choices and decisions from other companies.
For this reason the statement " One of the best ways to learn about the ethical responsibilities inherent in operating a business is to look at the mistakes made by other companies" is TRUE.
Suppose the Tampa Bay Rays baseball team charges $10 for bleacher seats (low quality seats in the outfield) and sells 250,000 of them over the course of the season. The next season, the Rays increase the price to $12 and sell 200,000 tickets.a. What is the price elasticity of demand for bleacher seats at Raysâ games?b. Assuming the marginal cost of admitting one more fan is zero, is the price increase a good idea
Answer and Explanation:
(a) ε = %ΔQ/%Δp
= ((200,000 − 250,000)/250,000)/((12 − 10)/10)
= −1.00.
Demand is unit elastic since | ε | = 1.00. Alternatively, if a price increase of 20 percent leads to a 20 percent decline in ticket sales, the elasticity is −20/20 or −1.00.
(b) The price increase is not a good idea . Total revenues have fallen from $2,500,000 = (250,000)(10) to $2,400,000 = (200,000)(12). Anytime elasticity is greater than one, an increase in prices will result in a drop in total revenue.
The price elasticity of demand for bleacher seats at Rays' games is -1, indicating that demand is unit elastic. Therefore, the price increase is not a good idea as it will result in fewer ticket sales.
Explanation:The price elasticity of demand for bleacher seats at Rays' games can be calculated using the formula:
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
In this case, the % change in quantity demanded is (200,000 - 250,000) / 250,000 = -20%, and the % change in price is ($12 - $10) / $10 = 20%. Plugging these values into the formula, the price elasticity of demand for bleacher seats is -1.
Since the price elasticity of demand is -1, it means that demand is unit elastic. This implies that a 20% increase in price leads to a 20% decrease in quantity demanded. Therefore, the price increase is not a good idea as it will result in fewer ticket sales.
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