A tariff is a tax on exported goods, if a tariff is too high then it will increase the cost of the item so the people who are buying have to pay more.
Answer:
d. percentage change in the quantity demanded of one good divided by the percentage change in the price of another good.
Explanation:
Price-demand elasticity measures the demand sensitivity of a good when a change in the price of another good occurs. For example, what happens to the demand for bread when the price of butter varies? This depends on the cross elasticity of demand since these goods tend to be complementary.
The price elasticity of cross demand between two goods is easily calculated by a formula where the numerator is the change in the quantity of a good and the denominator is the percentage change in the price of the complementary good.
If the calculation of elasticity is greater than 1, it means that the amount demanded for bread is sensitive (elastic) to the price of butter and tends to vary sharply. If the result is between 0 and 1, the demand is inelastic, that is, the amount of bread demanded will not change considerably when the price of butter varies. If the calculation is equal to 1, then the demand for bread varies perfectly with the price of butter.
Answer:
The firm's cost of preferred stock is 9.10%
Explanation:
The cost of preferred stock with the flotation of 5% would be the dividend payable by the preferred stock divided by the adjusted current market price(adjusted for flotation cost)
The dividend per year is $8
The adjusted price of the stock=$92.50*(1-f)
where f is the flotation cost in percentage terms i.e 5%
adjusted price of the stock is =$92.50*(1-5%)=$ 87.88
Cost of preferred stock=$8/$87.88*100 = 9.10%
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