Answer:
d. None of the answers is correct
$17,000 increase
Explanation:
As per the given question the solution is provided below:-
For reaching the change in income if the special order is accepted we need to follow some steps which are as follows:-
Step 1
Variable manufacturing cost per unit = Variable manufacturing costs ÷ Sale units
= $240,000 ÷ 24,000
= $10
Step 2
Cost related with special order = Number of units × Variable manufacturing cost per unit
= 3,400 × $10
= $34,000
Step 3
Income from special order = Number of units × Selling price
= 3,400 × $15
= $51,000
Therefore the Change in income if special order is accepted = Income from special order- Cost related with special order
= $51,000 - $34,000
= $17,000 increase
d. None of the answers is correct the right answer is $17,000 increase.
To reach the change in income if special order is accepted we simply put the values into formula.
Sadie is a reporter who has researched an in-depth article about the prevalence of mercury found in local fish. During her investigation she finds that although a few fish have been caught with high levels of mercury, for the most part, they are rare. Considering that Sadie’s organization needs to sell ad space, which title will she MOST likely pick for this article?
A.
No Cause for Alarm with Local Fish
B.
Few Fish Affected by Mercury, Study Finds
C.
Mercury Levels Not an Issue Here
D.
Toxic Ingredients in Local Seafood
The title that Sadie is most likely to pick for the article, considering that her organization needs to sell ad space, is B. Few Fish Affected by Mercury, Study Finds.
Why is the title appropriate ?The title of Sadie's investigation accurately portrays the rarity of local fish with high mercury levels. It puts forward an optimistic perspective by emphasizing the low incidence of mercury within these aquatic species, possibly sparking interest from advertisers and readers.
However, choosing option A which says No Need to Worry About Local Fish, may undermine concerns related to mercury poisoning risks in fish, hindering engagement from people and marketers alike.
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If a business owner wants to succeed, their business has to find their competitive advantage within one of the four main types of competitive structures: perfect competition, monopolistic competition, oligopoly, and monopoly. Select two different types of businesses in your community and determine the competitive advantage of each within its competitive structure. Name the businesses you selected and explain what products or services they sell that make them fit in that structure.
Business 1: A local coffee shop. The competitive structure it operates within is monopolistic competition. The competitive advantage of this coffee shop is its unique blend of coffee beans, cozy ambiance, and friendly customer service.
What is the competitive advantage?Business 2: A local grocery store. The competitive structure it operates within is oligopoly. The competitive advantage of this grocery store is its convenience, variety of fresh produce, and low prices.
Therefore, These are just examples and the actual businesses in your community may be different, but the idea of finding a unique selling point or advantage within the competitive structure they operate in is a common factor for success.
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Identify the features of stocks and bonds.
coupon rate
face value
closing price
maturity date
Stock? Bond ?
Plato/edmentum unit 3 finance
Answer:
Stocks:
closing price maturity rateBonds :
Coupon rate Face valueExplanation:
A stock entitles the holder to dividend payments and gives ownership right of a company to the holder.
The closing price of a stock is the last price that the stock sells for at the end of a trading session
A bond is a debt instrument.
what is e-reputation?
_______________________ are economists who generally emphasize the importance of aggregate supply in determining the size of the macroeconomy over the _____________.
Answer:
neoclassical economists; long run
Explanation:
Neoclassical economists are economists who generally emphasize the importance of aggregate supply in determining the size of the macroeconomy over the long run
Deposits of $1,530 each were received for advance tour reservations from 10 school groups. At November 30, all of these
deposits have been earned.
any waste material on the floor should be
Answer:
Cleaned...it's waste
buying a house is most likely a long-term goal for a person of which of these ages?
Answer:
A - "15 y/o"
or
B - "19 y/o"
(There are two types of this question for just choose which one is on it)
Tricia Grey is a salaried, exempt employee with Meganti Incorporated. She is single with one dependent and earns $28,600 per year.
Required:
Complete the payroll register for the biweekly pay period ending June 10, 20XX with a pay date of June 15, 20XX.
Answer:
Earnings per year = $28,600 per year
So, Biweekly Pay = $28,600 *2/52 = $1,100
Summary
Gross Name = Tricia Grey
Martial Status = Single
No. Withholding = 1
Period Salary = $1,100
Regular Earnings = $1,100
Gross Earnings = $1,100
PLEASE HELP WILL MARK BRAINLIST
PLEASE HELP ASAP!! (35 POINTS)
Why do some employees decline to participate in a company’s 401(k) program?
A. They already have too much set aside for retirement.
B. They are certain they will work all their lives and never retire.
C. They don’t want the company to provide matching funds.
D. They don’t want to set aside part of each paycheck.
- Please only put the correct answer and no links.
Answer: c
Explanation:
Future Cost: If one year of college currently costs $25,000, how much will it cost Grand Rapids, Michigan's resident Michelle Spindle to pay for one year of schooling for newborn daughter, Melissa, 18 years from now, assuming a 5 percent annual rate of inflation? Use Appendix A-1 or the Garman/Forgue companion website
With current rates of 25,000 dollars, Michelle Spindle will have to pay 52,360 dollars in fees for her daughter Melissa when she is 18 years old, assuming a 5 percent yearly rate of inflation.
Hence, answer is 52,360$
How to find?
Current fees= 25,000$
Annual Rate of inflation= 18%
So, by this per year increase would be = 25,000*18/100= 1250$.
After 18 years , the amount would be = 1250*18= 27,360
If, we add the current fees, then total amount would be= 25,000+ 27,360= 52,360$.
What is inflation, and what is an example?The gradual rise in the cost of goods and services over time is known as inflation. It causes money (like the U.S. Dollar) to lose value, which has negative effects including raising the cost of living.
Consider how much a sweets bar cost when you were a young child. Consider how much the same sweets bar would cost now.
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A stable process has which of these
no variation over time in output, no defects in the output, high volume of outputs, motivated workers
A stable process is characterized by no variation over time in output, no defects in the output, a high volume of outputs, and motivated workers. Achieving a stable process requires a focus on quality, productivity, and employee engagement.
By implementing control charts, quality control measures, statistical process control techniques, and other tools, organizations can achieve a stable process that delivers consistent, high-quality results.
A stable process has no variation over time in output. It means that the process can be accurately repeated to achieve consistent results. This can be achieved by implementing control charts to identify and control the variability of the process. If the process is stable, then it will produce consistent and predictable output. This is important because it ensures that customers receive a consistent level of quality in the product or service.
A stable process also has no defects in the output. The quality of the output is consistently high and free of defects. This can be achieved by implementing quality control measures and using statistical process control techniques to monitor and control the quality of the output. This helps to ensure that the customer receives a high-quality product or service.
A stable process also has a high volume of outputs. This means that the process can produce a large number of outputs efficiently and effectively. This can be achieved by optimizing the process and eliminating waste. This helps to improve productivity and reduce costs, which can lead to increased profitability.
Motivated workers are also important for a stable process. Motivated workers are more likely to take pride in their work and strive to improve the process. This can lead to increased efficiency, productivity, and quality. Motivated workers can also help to reduce turnover and absenteeism, which can improve overall productivity.
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Which 2 statements about non verbal communication are true?
Answer:
The 2 statements that are true about nonverbal communication are:
A) Nonverbal communication is not culture-bound and does not
reflect the values and norms of a culture.
B) Nonverbal messages communicate much about relationships.
What is Communication?
This refers to the means by which a message is transmitted from one person to another.
Hence, we can see that based on the given question, it can be noted that nonverbal communication does not need words and as such, it is not culture-bound and does not reflect the values and norms of a culture.
Explanation:
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What is the purpose of every item in the SHARKS mnemonic?
The purpose of every item in the SHARKS mnemonic is:
S – state the agenda before you start your meeting;
H – hijackers will be at your meeting, so watch out;
A - adding relevant information is the key to a good meeting;
R – repeat the agenda at the end of the meeting;
K - keep the meeting small and short;
S - scheduling should be outside the meeting.
What is the significance of a mnemonic?A mnemonic can be referred to or considered as a tool of the English language wherein the initial letters of a concept are used to easily memorize the concept effectively.
In the given condition above, the mnemonic of SHARK is used as an effective memory tool for memorizing the purpose behind each initial in a meeting of intelligence department.
Therefore, the significance regarding mnemonic is aforementioned.
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100 pts
The table identifies how many thousands of units of corn and diamonds the United States and Congo can produce in one week. Use this data to answer the question that follows.
Corn
Diamonds
United States
60
10
Congo
20
5
Which statement is true based on the data table?
The United States should specialize in diamonds and trade for corn.
The United States should specialize in corn and trade for diamonds.
Congo should specialize in corn and trade for diamonds.
Congo should specialize in both corn and in diamonds.
Answer:
In view of the units of corn and precious stones delivered by the US, the open-door cost of creating corn is B. 10⁄60.
What is the open-door cost of delivering corn?
The open-door cost of delivering corn to the US would be the number of precious stones that are surrendered to make one unit of corn.
This can be found as:
= Units of jewels/Units of corn
= 10/60 jewels
All in all, choice B is right.
Answer:
B) The United States should specialize in corn and trade for diamonds.
Explanation:
I got it right on the test
the family, school, church and the work place represent important social Institutions that affects entrepreneurship development. discuss
Answer:
The family, school, church and the work place are all important social institutions that affect entrepreneurship development.
Family: Families are often the first place where an individual’s entrepreneurial ambitions are nurtured and encouraged. Parents can create a culture that supports creativity, encourages risk taking, and allows for mistakes in order to foster a spirit of entrepreneurship in the home. Family networks provide the necessary resources such as financial support and emotional support that many entrepreneurs need to take their initial risks.
School: Schools play an important role in the development of future entrepreneurs. By teaching students about business, economics, and finance, they lay the foundation for a successful career in the business world. Additionally, schools may offer extracurricular activities such as clubs or competitions that enable students to apply their theoretical knowledge to the real world. These experiences often provide invaluable lessons that help to shape future entrepreneurs.
Church: The church also plays a role in encouraging entrepreneurial behavior. Churches often provide mentorship opportunities, where business professionals and budding entrepreneurs can share knowledge and experiences. In addition, churches may also provide valuable advice and counsel to would-be entrepreneurs on ways to obtain capital and develop plans for successful businesses.
Work Place: The workplace can be an invaluable resource for learning how to function as an entrepreneur. Through exposure to experienced managers and executives, aspiring entrepreneurs can learn the necessary skills to build a successful business. Additionally, many companies offer internships, apprenticeships, and other programs that can provide
A local partnership is liquidating and is currently reporting the following capital balances: Barley, capital (50% share of all profits and losses) $ 44,000 Carter, capital (30%) 32,000 Desai, capital (20%) (24,000 ) Desai has indicated that a forthcoming contribution will cover the $24,000 deficit. However, the two remaining partners have asked to receive the $52,000 in cash that is currently available. How much of this money should each of the partners receive
Answer:
Barley $29,000; Carter $23,000 ;Desai $0
Explanation:
Calculation to determine How much of this money should each of the partners receive
PARTNER WITH DEFICIT CAPITAL BALANCE
Barley,Capital(50%) Carter,Capital(30%)
Desai,Capital(20%)
Reported balances $44,000 $32,000 $(24,000)
Potential loss from Desai deficit
(split 5/8:3/8)
($15,000)($9,000) $24,000
Barley (5/8*$24,000=$15,000)
Carter (3/8*$24,000=$9,000)
Desai($15,000)($9,000) =$24,000
Cash distributions $29,000 $23,000 $0
Barley ($44,000-$15,000=$29,000)
Carter, ($32,000-$9,000=$23,000)
Desai($24,000-$24,000=0)
Therefore The amount of the money that each of the partners should receive is :
Barley $29,000; Carter $23,000 ;Desai $0
What is a residual plot?
Answer:
A residual plot is a graph that has on the vertical axis, the residuals and on the horizontal axis, the independent variable.
Explanation:
The residual plot gives a representation of the closeness of how each data point is vertically from the graph of the prediction equation from the model. It shows a fairly random pattern. If the data point is above or below the graph of the prediction equation of the model that is supposed to be the most appropriate for the data.
It is typically used to find problem with regression
Which one of the following reflects a weak internal control system?
a. all employees are well supervised
b. a single employee is responsible for comparing a receiving report to an invoice
c. a single employee is responsible for collecting and recording cash
d. all employees must take their vacations
The correct answer is d. all employees must take their vacations reflects a weak internal control system.
Cash collection and recording are handled by a lone employee. A solid internal control system won't let one person to be in charge of cash collection and recording. For instance, if the investment bank lacks a system of approvals or reviews for the transactions made by its traders, a trader may make a mistaken decision that results in a significant loss of money and then attempt to make up for the loss by engaging in more high-risk, high-reward trades. A failure in the execution or efficacy of your internal controls is known as an internal control weakness. Even the most robust security measures can be circumvented by bad actors who take advantage of lax internal controls.
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Bruce bought his car for $24,380. It is expected to depreciate an average of 14% each year during the first 6 years. What will the approximate value of his car be in 6 years?.
The approximate value of Bruce's car in 6 years is $9863 by depreciation method. Depreciation is the anticipated loss in value of a fixed asset over the course of a fiscal year.
What do you mean by depreciation?The purchase of tangible assets like buildings, machines, cars, and other items sometimes requires large lump sum payments. By depreciation, a tangible asset's use costs and benefits are linked throughout the course of its useful life. Depreciation comes in a variety of forms, such as accelerated and straight-line depreciation. Depreciation that has been accrued on an asset as of a certain date is referred to as accumulated depreciation.
Use the depreciation formula, where
'P' is principal amount, 'R' is rate, and 'n' is time in years. Given:
A= P (1-R/100)ⁿ
= 24380(1-14/100)⁶
= 24380(1-0.14)⁶
= 24380(0.86)⁶
Simplify the exponent:
A = 24380(0.40456723513)
Multiply:
A ≈ $9863
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implications of game theory
Answer:
Game Theory is a general mathematical analysis to investigate the strategic interactions among players. Game theorists attempt to provide precise descriptions of situations of conflicting interests in order to study the behavior that such a conflict would (or, in some cases, should) elicit from rational agents. Players are assumed to consider the position and perceptions of other players while forming their strategies. In our examples, we will assume that there are two players, and that each has two choices and the fact that the players are selfish (operate in their own best interests) and rational .
Limitations of Game Theory :
The biggest issue with game theory is that, like most other economic models, it relies on the assumption that people are rational actors that are self-interested and utility-maximizing. Of course, we are social beings who do cooperate and do care about the welfare of others, often at our own expense. Game theory cannot account for the fact that in some situations we may fall into a Nash equilibrium, and other times not, depending on the social context and who the players are.
Rains Company purchased equipment on January 1 at a list price of $125,000, with credit terms2/10, n/30. Payment was made within the discount period. Rains paid $6,250 sales tax on theequipment and paid installation charges of $2,200. Prior to installation, Rains paid $5,000 to pour aconcrete slab on which to place the equipment. What is the total cost of the new equipment
Answer:
$135,950
Explanation:
Calculation to determine the total cost of the new equipment
Using this formula
New equipment Total cost =(List price × (100% - 2%) + Sales tax + Installation + Concrete slab)
Let plug in the formula
New equipment Total cost=[$125,000 *(100%-2%)]+ $6,250 + $2,200 + $5,000
New equipment Total cost=($125,000 *.98) + $6,250 + $2,200 + $5,000
New equipment Total cost=$135,950
Therefore the total cost of the new equipment is $135,950
1.1.1 Name any one leakage in an economy. NAME ONE SECTOR INVOLVED MULTIPHER 1.1.2 What does the 45° line in the graph represent? 1.1.3 Briefly discuss the term autonomous consumption. 1.1.4 Explain the negative impact of a decrease in consumer spending on the size of the (2) multiplier. (1) IN DERIVING THE MACRO-ECONOMIC 1.2 Why is it important for a country to calculate its national income? [18] (1) 1.1.5 Calculate the multiplier when individual spending on consumption is 60%. Show all calculations. (4) (8)
1.1.1 One leakage in an economy is saving. The saving sector is involved in the leakage as individuals and businesses save a portion of their income rather than spending it on consumption or investment. Saving represents the portion of income that is not immediately injected back into the economy and can lead to a decrease in aggregate demand.
1.1.2 The 45° line in the graph represents the equilibrium level of output or income in an economy. It shows the points where aggregate spending (aggregate demand) is equal to aggregate production (aggregate supply). The line represents the condition where spending equals production, indicating a state of macroeconomic equilibrium.
1.1.3 Autonomous consumption refers to the level of consumption expenditure that occurs even when income is zero or negative. It represents the minimum level of consumption that individuals and households maintain regardless of their income. Autonomous consumption is usually influenced by factors such as basic needs, fixed expenses, or borrowing. It plays a crucial role in determining the level of aggregate demand in an economy.
1.1.4 A decrease in consumer spending has a negative impact on the size of the multiplier. The multiplier refers to the amplification effect that occurs when an initial change in spending or investment leads to a larger overall change in the economy. When consumer spending decreases, it leads to a decrease in aggregate demand, which in turn reduces the level of output and income. As a result, the multiplier effect is dampened, and the overall impact on the economy becomes smaller.
1.2 Calculating national income is important for a country for several reasons:
- It provides policymakers and economists with crucial information about the overall health and performance of the economy.
- National income data helps in formulating economic policies and making informed decisions related to fiscal and monetary policies.
- It allows for the comparison of economic performance across different countries and over time, providing insights into economic growth and development.
- National income calculations help in identifying income distribution patterns and inequalities within a country.
- It serves as a basis for calculating various economic indicators, such as GDP per capita, which are used to assess the standard of living and well-being of the population.
1.1.5 To calculate the multiplier when individual spending on consumption is 60%, we can use the formula:
Multiplier = 1 / (1 - Marginal Propensity to Consume)
Given that the individual spending on consumption is 60% or 0.6, the Marginal Propensity to Consume (MPC) would be 0.6. Substituting this value into the formula:
Multiplier = 1 / (1 - 0.6)
Multiplier = 1 / 0.4
Multiplier = 2.5
Therefore, the multiplier in this case would be 2.5.
NASA is conducting an experiment to find out the fraction of people who black out at G forces greater than 6. Step 2 of 2 : Suppose a sample of 502 people is drawn. Of these people, 140 passed out. Using the data, construct the 85% confidence interval for the population proportion of people who black out at G forces greater than 6. Round your answers to three decimal places.
The confidence interval is given as 0.250 and 0.308
How to solve for the confidence interval?
n = 502
x = 140
x/ n = proportion
= 140/502
= 0.2789
To find the proportion using 85%
1-0.85 = 0.15
0.15/2 = 0.075
Find the z value to be 1.44
\(p +- z*\sqrt{p'(1-p')/n\\}\\ = 0.279 +-1.44\sqrt{0.279(1-0.279)/502}\)
= 0.279 +- 0.029
= 0.250, 0.308
Hence the confidence interval is 0.250, 0.308.
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Valeria deposited $80 in an account earning 5% interest compounded annually. To the nearest cent, what is the total amount in the account after 2 years?.
After two years, Valeria will accrue interest of $8.20, rounded to the nearest cent. It will come to $88.20 in total.
What is the rate of compound interest?
Compound interest is calculated as interest on an account's principal plus any previously accumulated interest.
What is the balance of the account after a period of two years?
Using the following formula, compound interest can be calculated:
Since x equals compound interest, x = P (1+r/n)^nt.
Initiator = (the initial deposit or loan amount)
r is the annual interest rate.
n is equal to the number of compounding periods per second.
t is the duration for which the funds are borrowed or invested.
Given: Valeria put $80 into a savings account earning 5% interest annually compounded.
P = 80 dollars, r = 0.05 (5% represented in decimal form), t = 2 years, and n = 1 (annual compounded).
The formula becomes A = $80(1 + 0.05/1)^2 when these numbers are substituted.
= $88.20
Subtracting the principal from the total amount yields the amount of interest earned:
Interest equals $88.20 - $80, or $8.20.
Interest equals $8.20 as a result.
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The ratio of profit, cost of material and labour in the production of an article is 5:7:13 respectively. If the cost of material is 840 more than that of labour, find the cost of producing the article
Answer:
Explanation:
SOLUTION: The ratio of the profit, cost of materials and labour in the production of an article is 5 : 7: 13 respectively. If the cost of materials is GH¢ 840 more than that of labour. fin
The ratio of the profit, cost of materials and labour in the production of an article is 5 : 7: 13 respectively. If the cost of materials is GH¢ 840 more than that of labour. find the total cost of producing the article.
Note: GH¢ stands for Ghana Cedis
The problem formulation is HEAVILY INCORRECT.
One part of the condition says that the cost of materials and the labor are 7x and 13x respectively,
where x is their common measure, a positive value.
The other part says that the cost of materials (7x) is 840 MORE than that of labor (13x).
It can not be so, BECAUSE it can NEVER be so.
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Assuming all other factors are the same, which statement about the cost of
loans is correct?
A. A loan with simple interest will cost more than a loan with
compound interest.
B. A loan with simple interest and a loan with compound interest will
cost the same.
C. Interest compounded daily will cost more than interest
compounded monthly.
D. Interest compounded annually will cost more than interest
compounded quarterly.
SUBMIT
Answer:
=> C. Interest compounded daily will cost more than interest compounded monthly.The proper answer is Daily interest compounding is more expensive than monthly interest compounding. So, the best choice is (C).
What is interest?In the fields of finance and economics, interest is the payment made at a set rate by a borrower or deposit-taking financial institution to a lender or depositor in excess of the principal amount (the amount borrowed).
It is not the same as a fee that the borrower might pay to the lender or another entity. It also differs from a dividend, which is money given to shareholders (owners) by a company from its profit or reserve, but not at a set rate predetermined in advance, but rather on a pro rata basis as a share of the reward received by risk-taking businesspeople when revenue is earned that exceeds all costs.
Hence, option (C) is accurate.
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The Waterfall Buffet is self-service. From 9:00 a.m. to 12:00 p.m. customers arrive at the buffet
at a rate of five per minute; from 12:00 a.m. to 4:00 p.m the gallery is closed; and from 4:00 p.m. to closing at 9:00 p.m., at a rate of six per minute (Poisson distributed). All the customers take about the same amount of time to serve themselves and proceed to the buffet. Once a customer goes through the buffet, it takes an average of 0.4 minute (exponentially distributed) to pay the cashier. The gallery does not want a customer to have to wait longer than one minutes to pay. The gallery plan to set up three cashiers. Will this number be adequate to meet the
waiting policy?
Three cashiers may not be adequate to meet the waiting policy during peak hours. Galleries may need to hire additional cashiers or take other measures to reduce customer wait times during peak hours.
How did we arrive at this assertion?To gallery whether three cashiers are sufficient to enforce the waiting policy, we need to calculate the estimated wait time for customers at the counter.
Determine the average number of customers per minute at the buffet for each time period.
9:00 AM - 12:00 PM: λ1 = 5 customers/minute
16:00 - 9:00: λ2 = 6 customers/minute
It is closed between 12:00 and 16:00, so no guests. Apply Little's law to determine the average number of customers in the system.
L = λW
where L is the average number of customers in the system, λ is the arrival rate, and W is the average time spent in the system.
Assuming that customers spend the same amount of time at the buffet as at checkout, the average system time can be determined as follows:
W = 2 × 0.4 min = 0.8 min
So the average number of customers in the system is:
L1 = λ1 × W = 5 customers/min × 0.8 min = 4 customers
L2 = λ2 × W = 6 customers/min × 0.8 min = 4.8 customers
The M/M/c queuing model is then used to determine the expected wait time at the cashier. Arrival at Poisson, service time allocated exponentially and three cash (c = 3)
wq = (ρ ^ c / c / c! × (c × λ)) / (1 -ρ)
Here ρ = μ / (C × μ + λ) traffic resistance and μ = 1 / 0.4 minutes = 2.5 consumer / min.
Use the above value and evaluate the waiting waiting time.
ρ1 = λ1 / (c × mμ) = 5 customer / min / min / (cash × consumers / min) = 0.67
ρ2 = λ2 / (c × μ) = 6 client / division / (3 cash cash, × 2.5 consumer / min) = 0.8
Wq1 = (0.67 ^ 3/6 × 3/6 × (3 × 2.5 consumers / minute customer / min) / (1-0.67) = 0.14 minutes
Wq2 = (0.8 ^ 3/6 × (3 × 2.5 consumers / minutes consumers / minutes) / (1-0.8) = 0.64 minutes
We will add the waiting time expected to the cashier to consume the expected time for the customer.
Tq1 = 0.88.8 minutes + 0.14 minutes = 0.94 minutes
Tq2 = 0.8 minutes + 0.64 minutes = 1.44 minutes
According to this calculation, the expected waiting time is 9-12. Less than a minute coincides with atmospheric policy. However, the estimated waiting time for customers is between 16:00 and 21:00. More than 1 minute non-compliance with the waiting policy.
Therefore, 3 cashiers may not be enough to enforce the waiting policy during peak hours.
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The price elasticity of supply reflects the flexibility of firms to increase or decrease the quantity supplied.
Which of the following does NOT increase flexibility?
So far in this chapter, all of the elasticity metrics have been related to the demand side of the market. Knowing how sensitive the amount given is to a change in pricing is also helpful.
Let's say there is a surge in apartment demand. There will be a dearth of flats available at the previous level of rent, which will put pressure on rents to increase. With all other factors remaining constant, the lower the rise in rent necessary to address the shortfall and restore market equilibrium, the more sensitive the supply of available flats is to changes in monthly rates. In contrast, price would need to climb more if quantity provided is less responsive to price changes, resulting in a shortage brought on by a spike in demand.
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