Economics, Accounting & Business: Post your doubts here!

memyself

memyself

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Bint said:
The average consumer divides his expenditure between food, accommodation and clothing in the
ratio 5:3:2.
During the course of a year, the price of food rises by 10 %, the price of accommodation remains
constant and the price of clothing falls by 5 %.
Assuming that the weights of a price index reflect the expenditure of the average consumer, what
is the increase in the index over the year?
A

2.5 % B 4 % C 5 % D 6 %



CAN SOMEONE PLEASE EXPLAIN TO ME HOW SHUD THIS BE DONE? PLEASE... THE ANSWER IS B
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okay, i m not very sure but its somewhat done like this

5*10 (food proportion into 10% rise in price) + 3*0 (accomodation: no change in price) + 2* -5 (clohting into 5% reduction in price)
whole thing divided by the sum of ratios (5+3+2)

(50+0-10) / 10 = 4 !
 
youzair

youzair

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WaleedUQ said:
Just tell me how marginal cost effects the avc ac and tr
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when marginal cost increases so ac increases but at a decreasing rate
eg 5 unit cost on avg 10rs the marginal cost of making the 6th unit is 1rs so avg cost is now 1.83...

TR is affected by mr, when MR will be zero the TR will be at its optimum!
 
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Saiyan

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naheelnisar said:
please ans me.. guys i dint write the name of specific strategy but i have explained it thoroughly.. will i gte marks?
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You may get half the marks since the question clearly mentioned to state suitable marketing strategy.
 
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Saiyan

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Mad Gal said:
How was the dividends question answered?! Like, the overall idea?
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Do you mean by the business one? Just define price earning ratio and dividend yield. State that shareholders are the direct stakeholders and are interested with only the profitability. Dividends must increase or else GCC will lose its market price and shareholder. But then again increasing the profit may also affect the other stakeholders like workers and consumers. Workers may get redundant and quality may decrease due to the decrease in operating expense. Discuss the triple bottom line concept that profitability is not only the aim of the company although the primary.

In the end, it is better to go for capital reduction scheme which will improve the profitability of the company or just issue bonus share to make the shareholders be satisfied in the long run as selling off a division will not be welcomed by the other stakeholders.
 
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Manesh

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