Suppose the price of your product is $10.00. The variable cost per unit is currently $5.00, and the fixed costs are $15,000 per month. Suppose the company can invest in some equipment that will reduce the variable cost per unit to $3.00. However, the cost of financing the new equipment will increase the fixed costs to $17,500 per month. Compare the breakeven points for these two different options. Assuming the company believes it can sell 2,800 units of its product at $10.00 price, which is the better choice?

Answers

Answer 1

Case 2 is the better choice.

In this question, we first need to know breakeven units

So for that, we use the equation

Selling cost = ( Fixed cost + variable cost)

Selling cost per unit = ( Fixed cost + variable cost per unit)

S = F + V

s × x = (F + v*x)

So, X at BEP = F / (s - v)

Where F = fixed cost

(capital) S = selling cost

(Small) s = selling cost per unit

(Capital) V = variable cost

( small) v = variable cost per unit

So for case: 1

X at BEP = 3000 units

This means if we sell 3000 units then it will be equal means there is no profit and no loss.

But the company sell 2800 units for this case it is less than BEP sells so company may face loss

FOR CASE: 2

X at BEP = 2500 units

This means we can sell 2500 units. At these units, there will be no loss or no profit.

But the company sell 2800 units which is higher the BEP point so the company gets to profit from this.

SO, We can use: 2

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Related Questions

Do you think careers in computer graphics and animations are more artistic or more technical? Explain your answer.

Answers

Because they need so much imagery and creativity, I believe professions in computer graphics and animation are more creative than technical.

What is animation in computer graphics?

A sort of graphics known as computer graphics includes using a computer to create visuals. The idea of computer graphics is crucial to both current and future technological advancements. This serves as the foundation for many areas of digital photography, cinema, video games, mobile phone displays, and computer displays.

Using computer pictures to generate animated, movable objects is known as computer animation. The foundation for creating moving things, such as in filmmaking, is this kind of technology.

Because it takes a lot of creativity, imagery, and imagination to put together a beautiful piece of graphics, computer graphics and animation are more creative than technical.

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Columbia tires and pacific tires together control 75% of the tire market in the country. This is an example of what type of market structure?.

Answers

Oligopoly type of market structure.

An oligopoly is a market structure in which a few businesses or organizations control a particular industry. They are prone to base marketing choices (like pricing increases) on their competitors in order to maintain control. Some oligopoly characteristics include:

Interdependence: A single corporation is unable to decide on its own about a certain market.

Entry Barriers: Businesses will always make it tough for new rivals to succeed in their market.

Information: In order to keep control, rival businesses exchange information with one another.

The word "oligopoly" describes a situation in which a small number of producers collaborate, either overtly or covertly, to limit output and/or control prices in order to generate profits that are above average for the market.

Oligopolies can be created, maintained, or dismantled as a result of economic, legal, and technical considerations.

The prisoner's dilemma that each member confronts, which motivates each member to cheat, is the main challenge that oligopolies face.

Businesses in mixed economies frequently want government approval for strategies to reduce competition since government policy may either prohibit or support oligopolistic conduct.

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The realized return on a stock portfolio is the weighted average of the expected returns on the stocks in the portfolio.

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The realized return on a stock portfolio is the weighted average of the expected returns on the stocks in the portfolio is called cash credit portfolio.

Stock portfolio is when the stock markets are been invested and then they are been provided a rate of dividend where the shareholders get their shares if their is a bull phase in the economy and then low rate when there is bear phase.

Returns are provided to shareholders on the basis of their cash credit portfolio which is determined by the credit rate and their capacity to pay back on the average.

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there is a zero coupon bond that sells for $4,444.48 and has a par value of $10,000. if the bond has 24 years to maturity, what is the yield to maturity? assume semiannual compounding.

Answers

The Yield to maturity (YTM) of the Bond will be 3.41%

Variables                     Financial Calculator Keys                         Figure

Face Value [$10,000]                       FV                                         10,000

Coupon Amount [$10,000 x 0%]    PMT                                            0

Yield to Maturity [YTM]                    1/Y                                             ?

Time to Maturity [24 Years x 2]        N                                              48

Bond Price [-$4,444.48]                   PV                                    -4,444.48

Yield to maturity :

The yield to maturity (YTM), book yield, or redemption yield of a bond or other fixed-interest security, such as gilts, is an estimation of the total rate of return expected to be earned by an investor who purchases a bond at a specific market price, holds it until maturity, and receives all interest payments and the capital redemption on time. The discount rate at which the present value of all future cash flows from the bond (coupons and principal) equals the bond's current price is known as the internal rate of return (IRR, total interest rate). The YTM is frequently expressed as an Annual Percentage Rate (A.P.R. ), but market convention is more frequently used.

So, the required answer is 3.41%

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Which type of business does not hold owners accountable for the debts of
the business?
OA. Sole proprietorship
OB. LLC
OC. Partnership
A
OD. Private company

Answers

Answer:

Limited Liability Company (LLC)

Explanation:

A limited Liability Company (LLC) is a business structure in the United States that protects its owners from the personal responsibility for its repayment of debts and liabilities. It is a hybrid entity that has the characteristics of a corporation, partnership and sole proprietorship. The regulation of LLC's varies from one state to another. An entity or individual can be a member of an LLC with notable exceptions from banks and insurance companies. The primary reason for registering a business under LLC is to limit the personal liability of the owners as well as the partners. LLC may have some attractive features but they also possess some great disadvantages as well. Depending upon the state law, an LLC may be dissolved upon the death or bankruptcy of a member.

Question 18(Multiple Choice Worth 4 points)
(01.08 LC)
Which of these investments may pay dividends?
Bonds
O Savings accounts
Certificates of deposit
O Stocks

Answers

Stocks are referred to or considered as such a class of assets, over which investors receive dividends at regular intervals until such stocks are sold. As a result, option D is correct.

What exactly are stocks?

A stock, also known as equity, is a financial instrument that represents ownership of a portion of the issuing corporation. Shares are units of stock that entitle the owner to a proportion of the corporation's assets and profits equal to the amount of stock they own.

Stocks are primarily bought and sold on stock exchanges and serve as the foundation of many individual investors' portfolios. Stock trades must adhere to government regulations designed to protect investors from deceptive practices.

Corporations issue stock to raise funds to run their businesses, and stockholders, or shareholders, may be entitled to a portion of the company's assets and earnings.

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What industry has increased profits by $200 billion since 2020 offering hundreds of thousands of jobs every month?.

Answers

The Industry has increased profits by more than a 200Billion Dollars since 2020 and has also been offering jobs every month other than the IT industry. Hence, the statement is proven.

What is the IT industry?

IT industry is one of the world's most important and foremost services which has been in the Global upliftment for a long time. The most important thing regarding this has been the continuous rise of the IT industry which has been in the spike upwards.

The IT industry or information technology has also been trending for a long time. Information technology is now, especially in the 21st Century is one of the most dependable industries because of the communications system, telecommunications, and also a lot of services.

Hence, the IT industry is the largest growing and most successfully running a business in the world.

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If a new product catches on during the introduction​ stage, which stage of the product life cycle will it advance​ to?.

Answers

If a new product catches on during the introduction​ stage, the product life cycle will it advance​ to the maturity stage. Thus the correct option is A.

What is the product life cycle ?

The time period between a product's first introduction to users and its eventual removal from the market is known as its life cycle. The introduction, growth, maturation, and decline stages of a product are all included in it.

When a product is already achieved success in the introduction stage it means growth is to be done in the introduction stage so it will directly move to the maturity stage.

Therefore, option A is appropriate.

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Teh complete question is probably

When a product is successful in the introductory stage of the product life cycle,?

it moves directly into the maturity stage.

it may start to see profits toward the end of this stage.

it is most likely to begin to launch spinoffs.

marketing costs increase significantly.

competition becomes less important.

the key to successfully competing is understanding what customers want and then satisfy those wants. multiple choice designing products and services that finding suppliers who can hiring enough workers to finding the best way to training production workers to

Answers

The key to successfully competing is understanding what customers want and then finding the best way to satisfy those wants.

Time-based strategies are used to reduce lead times. H. The amount of time from when your order is received until the product is shipped. Companies that can produce faster often have lower costs. These companies can use lean manufacturing to speed up their processes. Operations management monitors an organization's entire operating system.

Operations management is essential for businesses to seamlessly manage their day-to-day activities. Operations management controls all processes and addresses issues such as system design operation Successfully competing maintenance and improvement. Operational strategies provide opportunities to improve products services and processes. To develop a strategy consider business Corporate strategy and market needs analysis.

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Which of the following is not a requirement of the sarbanes-oxley act?

a. A certain number of hours, which is based on the size of the company being audited, must be spent on each audit engagement.
b. Firms that audit public companies are subject to inspection by the PCAOB.
c. Audit firms cannot provide most types of nonaudit services to their public company auditees.
d. Audit firms are required to rotate audit partners off audit engagements every five years for public company audits.

Answers

The Sarbanes-Oxley Act does not mandate a minimum time commitment for each audit engagement, which is based on the size of the company being audited.

The Sarbanes-Oxley Act of 2002 was enacted by the US Congress on July 30 of that year in an effort to safeguard investors from corporate financial reporting that was false or misleading. The SOX Act of 2002, often known as the Dodd-Frank Act, required stringent updates to audited current securities laws and placed severe new penalties on offenders.

In reaction to early 2000s financial scandals involving publicly traded businesses like Enron Corporation, Tyco International plc, and WorldCom, the Sarbanes-Oxley Act of 2002 was passed. Investor confidence in the reliability of corporate financial statements was audited shaken by the high-profile thefts, which prompted many to call for an update to the regulations' long-standing requirements.

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the planet corporation produces a product that passes through two processes. during june, the first department transferred 63,000 units to the second department. the cost of the units transferred was $94,500. materials are added uniformly in the second process. the following information was provided about the second department's operations during june:

Answers

Units completed in Planet Corporation's second department during June would be 54600.

What are units of energy?

The SI unit for energy is the joule (J), which was created in honour of James Prescott Joule and his research on the mechanical equivalent of heat. Since energy is defined by work, the SI unit of energy is also the same as the unit of work. Kilowatt-hours (kWh) are used as a measure of electrical energy, especially for utility bills. One kWh is equal to 3.6 megajoules. Kilowatt-hours per year or another period are frequently used to measure electricity use. The average rate at which energy is transported is actually what is being measured here, not average power consumption. There are approximately 0.11 watts in a kilowatt-hour per year.

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the time periods associated with a set of supply curves include: multiple select question. the short run. the immediate period. the market period. the long run.

Answers

In the short run, the immediate period, and in the long run the time periods associated with a set of supply curves include. The correct options are A, B, and E.

What are the types of supply curves?

In the meantime, there are two kinds of supply curves: market supply curves and individual supply curves. The market supply schedule is represented by market supply curves, while individual supply curves graph the individual supply schedule.

Time has a significant impact on supply elasticity as well. In the long term compared to the short run, supply is more elastic. Finding the cause is simple. Following a change in the relative costs of two products, shifting resources between them becomes easier the longer the time horizon.

Thus, the ideal selections are A, B, and E.

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One example of using​ ________ as a competitive advantage occurred when procter​ & gamble added a​ tartar-fighting ingredient from toothpaste to its dry adult pet foods.

Answers

One example of using​ innovation as a competitive advantage occurred when Procter​ & Gamble added a​ tartar-fighting ingredient from toothpaste to its dry adult pet foods.

What is competitive advantage?

Competitive  advantage  can be defined as the way in which a company or an organization tend to produce product that will give them upper hand  over others competitors that product the same or similar product as theirs.

Some companies tend to reduce the price of the goods the sell so as to have competitive advantage over others  because they knows that by reducing the price of the product more customers will buy from them  than the other company that sells similar product as theirs.

This scenario best illustrate what is  called competitive advantage based on the fact that proctor​ & gamble  decide to add some unique ingredient in their product so as top have competitive advantage over others.

Therefore we can conclude that the company  is trying to have competitive advantage over others.

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for most of us, many of the choices we make are so __________ that we fail to recognize them as decisions at all because we do not even realize we are making choices.

Answers

For most of us, many of the choices we make are so habitual that we fail to recognize them as decisions at all because we do not even realize we are making choices.

One type of automatic and regular behavior is habit. People frequently engage in this behavior because it is simple, cozy, or satisfying. The automatic nature of habitual behavior is illustrated by the fact that it is frequently sparked by a stimulus or a change in the environment. The process of developing routine behaviors intended to speed up learning is known as habitual learning. I learn through books, online courses, mentors, and experimenting above all else rather than relying on the myth that "to learn something, I must attend to school."

Everyone has the right to choose their own path in life and to make choices about it. Every individual has various views on what is significant and what makes them feel the best. Making choices about what to do is crucial since it gives your life purpose.

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in the island of microtania, the marginal propensity to consume is 0.80. the government of microtania is considering a proposal to spend $10 million to upgrade its roads and bridges. how much in aggregate expenditures will this spending generate for the economy?

Answers

$50 million aggregate expenditures will generate for the economy.

As Marginal Propensity to Consume is 0.8 and Proposal to spend is 10 million.

The marginal propensity to consume is a measure of induced consumption in economics, which is the idea that an increase in disposable income leads to an increase in personal consumption. Propensity to consume is the percentage of disposable income that people spend on consumption.

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given an actual demand this period of 103, a forecast value for this period of 99, and an alpha of .4, what is the exponential smoothing forecast for next period? group of answer choices 94.6 97.4 100.6

Answers

The exponential smoothing forecast for subsequent length is 101.6.

The required details for exponential smoothing forecast in given paragraph

Forecasts produced the usage of exponential smoothing strategies are weighted averages of beyond observations, with the weights decaying exponentially because the observations become older. In different words, the extra latest the remark the better the related weight. Exponential Smoothing Methods are a own circle of relatives of forecasting models. They use weighted averages of beyond observations to forecast new values. The concept is to offer extra significance to latest values within side the series. Thus, as observations become older in time, the significance of those values get exponentially smaller.

For any α among zero and 1, the weights connected to the observations lower exponentially as we move again in time, therefore the name “exponential smoothing”. If α is small (i.e., near zero), extra weight is given to observations from the extra remote beyond.

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the courses jacob has been taking that relate to his current job fall into which category? multiple choice development interpersonal relationships career management assessment training

Answers

The courses Jacob has been taking that relate to his current job fall into the training category. Option D

This is further explained below.

What is training?

Generally, Teaching, or developing in oneself or others, any skills, knowledge, or fitness related to certain relevant competencies is what we mean when we talk about training.

Training is designed to improve a person's capabilities, capacities, productivity, and performance in specified ways.

Training refers to the process of enhancing an employee's knowledge and abilities in preparation for performing their duties in a certain job. The goal is to enhance both the job performance and the behavior of people who have been taught.

In conclusion, Training because the primary goal of training is to assist people in becoming more productive in their existing positions.

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jamal is selling his townhome for $242,000, and closing is set for july 20. he has a loan balance of $193,000 at a 3.7% interest rate, and he’s current on his payments. jamal has prepaid the property taxes ($1,165) and insurance ($745). using a calendar year proration method for calculations, how will these amounts appear on jamal’s closing statement?

Answers

If he’s current on his payments. using a calendar year proration method , how the amount will appear on his closing statement is : Seller credit of $857.72.

Seller credit

First step is to calculate the tax and insurance daily rates

Tax and insurance daily rates = ($1,165 ÷ 365 days in a year) + (745 ÷ 365 days in a year )

Tax and insurance daily rates =  $3.19 + $2.04

Tax and insurance daily rates  = $5.23

Second step is to calculate the amount that will appear on the closing statement

Seller credit = $5.23 × 164 days from closing until year end

Seller credit  = $857.72

( Note that the 164 days is from closing until year end )

Therefor we can conclude that the amount of $5.23 which is the seller credit is the amount that will appear on the closing statement.

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Which of the following statements regarding the statement of cash flows are correct?

a. The statement of cash flows analyses change in conservative balance sheet in conjunction with the income statement
b. The statement is organised to present classification of total cash inflows and cash outflows
c. The statement of cash flows only analyses change in current assets and current liabilities
d. The statement of cash flow is an optional financial statement
e. None of the above statement is true

Answers

The statement of cash flows analyses change in conservative balance sheet in conjunction with the income statement is true.

At a given point in time, balance sheets demonstrate what a company holds and what it owes. Income statements show how much cash a company made and spent over time. Cash flow statements depict the cash that flows between a corporation and the external world over time. Net income from the income statement's bottom connects to the balance sheet and cash flow statement. It feeds into retained earnings on the balance sheet and serves as the preliminary step for the cash from operations section on the cash flow statement.

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recall that the demand curve presents your marginal benefit curve. with this in mind, and with no change in the availability of water, why is it that your willingness to pay for water is relatively small compared to other, nonessential to life, goods?

Answers

The demand curve presents your marginal benefit curve. With this in mind, and with no change in the availability of water, your willingness to pay for water is relatively small compared to other, nonessential to life, goods because the benefits of water are not as great as the benefits of other, nonessential to life, goods.

What is demand curve?
The relationship between the cost of a good as well as service and the amount demanded over a specific time period is represented graphically by the demand curve. The price and quantity demanded are typically represented with the price on the left vertical axis and the horizontal axis, respectively. Knowledge of the Demand Curve The law of demand states that as the price of a given good rises, the quantity demanded decreases, all other things being equal. This is expressed by the demand curve moving downward from the left to the right. Economics is an exception to the general rule that independent variable appears just on horizontal or x-axis.

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Which one if the following items appear on a balance sheet? a. Accounts payable. b. Sales revenue. c. Utilities expense. d. Cost of goods sold.

Answers

One of the items on the balance sheet is accounts payable. Liabilities are included on the balance sheet, and accounts payable are regarded as a liability.

The term "Accounts Payable liability" refers to a general ledger account that represents a company's obligation to pay back a short-term loan to one of its suppliers. It is vitally important for Accounts Payable to be listed on a company's balance sheet.

An increase in the accounts payable suggests that a business is using loans to pay for more goods and services than cash. When the accounts payable decreases, the company is paying cash rather than borrowing money for more services and goods.

All of this contributes to keeping the business' cash flow under control, which is crucial for the balance sheet. The financial statement of an organization's assets, capital, and liabilities at a certain point in time, including the income-expenditure and balance during the previous period, is referred to as a balance sheet.

One of the three most important financial reports is the balance sheet. The main purpose of a balance sheet is to notify individuals who are interested in a firm about that company's financial status.

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suppose the number of buyers in a market decreases (which decreases demand) and a technological advancement (which increases supply) occurs also. what would we expect to happen in the market?

Answers

Equilibrium pricing would decline, but it was unclear how this would affect equilibrium quantity. As the number of consumers declines, the demand also declines. At the same time, technological advancements lead to a rise in supply, which lowers prices while maintaining the same level of output. The correct option is B

When demand and supply are equal, a market is said to be in equilibrium. When a shift factor, such as a change in demand or supply, affects the market, the equilibrium point shifts.

The demand curve in the market shifts to the left as the quantity of purchasers declines. Prices and quantity decrease with a shift to the left. However, as technology advances, productivity rises, shifting the supply curve to the right. Prices decrease and quantity increases when the market shifts to the right. As a result, it is certain that the price will decrease. However, without more details, it is impossible to determine the effect on quantity.

The correct answer is b) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.

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COMPLETE QUESTION:

Suppose that the number of buyers in a market decreases and technological advancement occurs. What would we expect to happen in the market?

a) The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.

b) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.

c) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

d) Both equilibrium price and equilibrium quantity would increase.

suppose the price elasticity of supply for soccer balls is 0.3 in the short run and 1.2 in the long run. if an increase in the demand for soccer balls causes the price of soccer balls to increase by 20%, then the quantity supplied of soccer balls will increase by about a. 0.67% in the short run and 0.17% in the long run. b. 6% in the short run and 24% in the long run. c. 3% in the short run and 1.2% in the long run. d. 66.7% in the short run and 16.7% in the long run.

Answers

The price elasticity will be 6% in the short run and 24% in the long run.

The supply for the soccer ball in the short run = 0.3

The supply for the soccer ball in the long run = 1.2

Price increase = 20%

Therefore,

In the short run -

The effect of a 20% increase in the price of soccer balls will result in

= 0.3 × 20%

= 6%

In the long run -

The effect of a 20% increase in the price of soccer balls will result in -

= 1.2 × 20%

= 24%

Thus, in both the long and short run the price elasticity will be different. It will be 6% and 24%.

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The extent to which a firm’s future international earning power is affected by changes in exchange rates in the long-run is known as ________ exposure.

Answers

Future international earning power is affected by changes in exchange rates in the long-run is known as Economic exposure.

Earnings are the net advantages of a corporation's operation. Income is also the quantity on which company tax is due. For an analysis of specific elements of corporate operations numerous more unique terms are used as EBIT and EBITDA. Many alternative phrases for income are in common use, along with profits and income.

Earning more money can mean you've got extra alternatives however it does not guarantee you'll make the right alternatives or prudent picks so you nonetheless want to understand the standards of saving, spending, investing and sharing. in case you need to spend more, store extra, make investments more or provide more to others, you have to earn extra.

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Which of the following is the best example of a positive externality?

a. A car company lays off 10,000 employees in order to cut costs.
b. An individual drives a large SUV, which increases the amount of greenhouse gases in the atmosphere.
c. An individual smokes in a restaurant, which bothers other patrons.
d. A child is vaccinated against a disease, which reduces the probability that other children will catch the disease.

Answers

The best illustration of a positive externality is when a child receives a vaccination against a sickness, which decreases the likelihood that other kids would contract the illness.

An externality is a fee or benefit a producer generates but does not personally bear or receive. An externality can result from the creation or use of a product or service and can be both positive and negative.

A benefit received by a third party as a result of an economic transaction is known as a positive externality. Free-riders are those who take use of favourable externalities without paying for them, yet society may profit if they purchase products that produce significant external benefits.

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What is one of california's sets of base lines and meridians?

Answers

One of California's three main meridians is the San Bernardino meridian, which was first created in 1852. Surveys in all areas of the state must employ three meridian-baseline sets due to the state's shape.

The city and county seat of San Bernardino County, California, is San Bernardino. The city, which is a part of Southern California's Inland Empire, had 222,101 residents as of the 2020 census, making it California's 18th-largest city. The San Bernardino Valley and the Inland Empire are economically, culturally, and politically centered in San Bernardino.

The only consulates in the metropolitan region were erected by the governments of El Salvador, Guatemala, and Mexico in the city's center. San Bernardino also acts as an anchor city for the San Bernardino-Riverside MSA, which is the 13th biggest metropolitan area in the United States and the third largest in California (after Los Angeles and San Francisco).

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which of the following is not a problem associated with the use of social media in marketing? using social media to build customer loyalty constant need for new content legal issues related to consumer privacy staying current with technology changes

Answers

The need for new content is not a problem associated with the use of social media in marketing.

What is marketing?
Marketing is the term used to describe the activities a business engages in to encourage the purchase or sale of a good or service. Delivering goods to customers or other businesses includes marketing activities like advertising and sales. Affiliates will occasionally carry out marketing for a business. Employees in a company's marketing and promotion divisions aim to attract the attention of key target audiences through advertising. Promotions are aimed at specific demographics and may include celebrity endorsements, memorable slogans or taglines, eye-catching packaging or graphic designs, and general media exposure. All of a business's efforts to entice customers and keep them as clients are included in the discipline of marketing.

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many loan agreements have financial covenants that rely on: multiple choice floating gaap. fixed gaap. flexible gaap. regulatory accounting procedures (rap).

Answers

Many loan agreements have financial covenants that rely on floating GAAP .

What is meant by floating GAAP ?

Floating GAAP" refers to accounting for periodic changes in GAAP.

The interested parties may disagree on how the changes to the accounting practices should be reflected or how they impact the various defined terms used in the facility agreement, even when the terms of the facility agreement under frozen GAAP specify the procedure to address such changes (or are based on floating GAAP). Even on how the various components of operating leases (such as the rental, interest, and other payments) should now be handled, the parties may dispute.

An agreement wherein the parties concur that financial reporting and the computation of financial covenants under a loan agreement shall be based on the GAAP that was in effect on a certain date is referred to as "frozen GAAP."

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Which of the following are production activities that are included in GDP? Which are not?

a) Mr. King performs the service of painting his own house instead of paying someone else to do it.
This activity is _____ in the GDP.

b) Mr. King paints houses for a living.
This activity is _____ in the GDP.

c) Mrs. King earns income from parents by taking baby photos in her home photography studio.
This activity is _____ in the GDP.

d) Mrs. King takes photos of planets and stars as part of her astronomy hobby.
This activity is _____ in the GDP.

Answers

Option a is correct Instead of hiring a professional to paint the house, Mr. King will do it himself. GDP does not include this activity.

GDP, or gross domestic product, includes the monetary value of all goods and services produced within a country. It includes all private and public investment and exports net of taxes and imports.

Choices b, cad are incorrect because GDP represents only domestic production, not foreign activities. GDP does not provide details on how income is distributed. GDP provides details about the economic situation of a nation. GDP does not reflect the sound welfare of a nation, such as human development, infant mortality and living standards.

GDP accounts for factory production, but does not account for any production carried out at the cost of environmental degradation.

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Is it possible to tell from the income elasticity of demand whether a product is a luxury good or a​ necessity?.

Answers

Yes. It is. It is possible.

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