Answer: D. The equilibrium quantity would rise, while the effect on equilibrium price would be uncertain.
Explanation: The quantity of latte produced would escalate as the newly introduced machine decreases labor needs and enhances efficiency. Consequently, larger quantities of lattes will be generated in shorter durations. Similar effects would occur if it is found that the coffee used in making lattes prevents heart attacks.
In both scenarios, the quantity at equilibrium grows. However, the equilibrium price's impact is less clear, as the revelation that coffee helps prevent heart conditions could lead to higher latte prices since suppliers would want to benefit from this knowledge, whereas the introduction of machines may cause prices to drop because of increased production scale.
-------------------------------july-------August-----Sept
Sales(unit) - - - - - - - -70000 - - 83000 - - - - - -
Production(Units)----73250 - -84750--91750
October expected sales = 97000
Ending Inventory for August
Production 84750
Less: Sales 83000
Add: Begin Inventory (83000*25%) - - 20750
Ending Inventory 22500
September:
Production in Units 91,750
Add: Beginning Inventory
Working note) 22,500
Less: Ending Inventory
( 97000X25%) (24,250)
Budgeted Sales Units 90,000
Answer:
The total payoff is $50000
Explanation:
solution
The payment is represented at a certain point in a circular format.
This reflects the cumulative results and their probabilities.
The total payoff point is
total payoff = 0.5 × $100,000 + 0.5 × 0
total payoff = $50000
It indicates that the best decision would be the cancer lab, as it presents the highest expected return of 60000
