Question

A firm in the year 1990 bought 60 baseball bats for $20 each and sold 40 of them in the same year for $ 25 each. What was the firm’s profit or loss for the year?

Q5:

1. The cost of a baseball bat to a trading company is $ 28. What should its selling price be if it wishes to earn 25% as a percentage of cost.
2. The cost of a baseball bat to a trading company is $ 28. What should its selling price be if it wishes to earn 25% as a percentage of sales.

 

Answer 1

A firm in the year 1990 bought 60 baseball bats for $20 each and sold 40 of them in the same year for $ 25 each. What was the firm’s profit or loss for the year?

Cost of the firm = 60*20 = 1200

Revenue earned => 40*25 = 1000

So, the form is in loss of 1200-1000 = 200

Q5.

a) Selling price if it wishes to earn 25% as a percentage of cost => 28*1.25 = 35
b) Let,
selling price = x

So, 28+x*25% = x

or, x = 28/75% = 37.33333333

Calculate elasticity for the following product and interpret it- is the demand elastic, inelastic, relatively elastic etc. Also what more can be said about the product?

When the price of the product falls from $10 to $ 6, then the quantity demanded of the product falls from 200 units to 170 units.

% change in quantity demanded = 30/200 = 15%
% change in price = 4/10 = 40%

Demand elasticity = % change in quantity/% change in price = 15%/40% = 0.375

As demand elasticity is less than 1, this is inelastic demand