Answer:
The true statements regarding the market are:
1) The cupcakes are priced below their equilibrium level. This is evident as excess demand exists, which wouldn't be the case at the equilibrium price.
3) Customers getting cupcakes are those who value them the most, seen through their willingness to queue before the bakery opens.
4) The bakery does not rely solely on price for distributing cupcakes. Timing plays a role; only those who arrive early get them.
Statements (2) and (4) are incorrect because those conditions only hold true at the equilibrium point.
Using cash is counterproductive and disadvantageous because relying solely on it leads to a lack of credit history, making it difficult for banks to assess your reliability for loan repayment.
Answer:
Japan $760
The United States $1,600
France $6,320
Explanation:
Total personal revenue is calculated as disposable income minus personal taxes. Earnings from employment, after deducting actual taxes, reveal the net established income.
The household saving rate is defined as total savings divided by disposable income.
Household saving = Disposable income * Household saving rate
Japan:
$40,000*1.9% = $760
United States:
$40,000*4% = $1,600
France:
$40,000*15.8% = $6,320
Answer:
The solution is a. 14.33.
Explanation:
We employ the net present value (NPV) analysis to evaluate the two scenarios.
+ The NPV for the lifetime subscription is $(850)
+ The annual subscription has an NPV calculated as - 85 - [ 85/6% * [ 1 - 1.06^(-n) ], where n represents the years the subscriber is expected to live.
In order for the lifetime subscription to be more advantageous, its NPV must exceed that of the annual subscription, which gives us:
85 + [ 85/6% * [ 1 - 1.06^(-n) ] > 850 <=> 1 - 1.06^(-n) > 0.54 <=> 1.06^(-n) < 0.46 <=> -n < -13.33 <=> n > 13.33.
This indicates that the subscriber needs to live beyond 14.33 years (13.33 + 1 additional year for the next subscription) for the lifetime subscription to be the wiser choice.
Thus, option a is correct.
The company may continue with the advertising, but this is contingent on ensuring that the 1% revenue increase is equal to or exceeds the $10 spent on advertising.
Here's the reasoning:
A revenue uptick of 1% suggests that the advertisement played a role in attracting more customers. This opens possibilities for the company to maintain consistent advertising next year, potentially adapting the ad channel, enhancing ad quality, or changing its timing and location. The 1% increase could even equate to $20, although the actual revenue remains unspecified. Conversely, if the 1% growth is noticeably less than the advertising costs, the business should consider consulting with experts.
