A higher sales revenue will occur for etisalat which means the income the company receives from business activities, usually happen from sale of goods and services to customers. Etisalat will also have more opportunities to invest in upcoming projects. If the opposite occurs and etisalat has low availability and higher costs it would mean, people spend less on their goods/services which would mean there’s a low
Keeping in mind the customer buying criteria, how would you increase margins for a low end product? How would you increase margins for a high end product? To increase margins for a low end product you would have to lower the price, for a high end product labor costs would need to be
Lower reserve requirements will result in more funds being available to loan out. This should, in turn, increase the rate of economic growth. Conversely, a higher reserve requirement will reduce the availability of funds and should slow economic growth. In this case, we need to increase our rate of economic growth in response to the recession, so I choose to lower the reserve requirement. The reason I would make this choice is to stimulate lending to businesses, reduce unemployment and increase household income so that the economy could then recover naturally.
However, pensioners will be hit hard because the extra income they earn from saving will have dramatically reduced, making them worse off. On the other hand, savers may leave the pound for better interest rates in other countries (hot money), causing a fall in the demand for the pound. As a result the value of the pound will fall, making exports cheaper and there will be an injection of net exports. In conclusion, the impact of loose monetary policy will be beneficial to the economy because extra consumption and investment will cause AD to increase which will increase economic growth. However, it takes a long time for changes in interest rates to feed through to consumption and investment and by then the economy may have gotten worse.
Explain your answers. a. If a firm in the industry wishes to increase total sales revenue (ignoring cost considerations), will it raise or lower its selling price? Why? The selling price would only increase because the absolute value of -2.5 is 2.5 which are greater than 1 meaning it is elastic and an increase in price leads to a reduction in total revenue.
I do not agree with her as well on raising the bank reserve requirements as it can restrain lending from banks and as a result it will shrink the economy growth. After analyzing my colleagues’ recommendations, and as the president’s senior economic advisor, I recommend the following: * We should lower income taxes. This shall increase the aggregate demand as the consumer disposable income will increase, which leads to an increase in the consumer spending. If the consumer spending increases, it will bring back up the flow of business and operations which means more jobs opening in the market and low unemployment rates. * Lowering banks’ interest rates.
However, due to the higher prices, there is a certain segment to which these brands can appeal to – this strengthens the power of the buyers. Because of the high competition and many brands within the industry – there are low switching costs for the buyer. This is complemented by online shopping, which means that the retailers do not even need to be physically in the same place. This lowers the switching costs for the buyer and increases their power. The rise of the ethical social consumer and the information availability that came with the internet made the buyer demanding and less likely to develop loyalty towards a brand – this increases their power.
This would increase the costs and result in the firms passing on the costs to the consumers, this would increase the prices of the goods causing negative externalities and discourage them from being bought. If there is an over production in the goods due to negative externalities, it means (s) has shifted to (s1). Which results in too many goods being supplied out to the public. The prices are also very low which makes it easier for them to buy goods, especially those with lower income. At the point the social cost [s1] is not taken into account only the private cost is.
a. Reduction in price will cause the contribution margin to decrease, thus, breakeven point will increase. b. Increase in Direct Labor cost will increase the cost and will cost the contribution margin to decrease, thus, the breakeven point will increase. c. Installation of new ventilating equipment produced depreciation (fixed cost) which will decrease contribution margin, thus the breakeven point will increase.
The change from 26.7 to 58.9 when [pic] falls from $12 to $4 measures the sum of these two effects. To analyze those two effects, we have to learn how to decompose the effect of a price change into income effect and substitution effect. [pic] Fig 5.2 Def of Substitution effect: If utility held constant, as the price of the good increases, consumers substitute other, now relatively cheaper goods for that one. Def of income effect: An increase in price reduces a consumer’s buying power, effectively reducing the consumer’s income and causing the