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Owner's Equity

this is the computation to get the marginal error

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princebacolor8
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11 views1 page

Owner's Equity

this is the computation to get the marginal error

Uploaded by

princebacolor8
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Prince C.

Bacolor BSA 1-B

Activity 3 Solve the Elasticity Problem


Analysis and Managerial Decision:
 In the given data income elasticity of demand is greater that 1. It implies that Colgate and
Palmolive’s product are considered elastic. Given in the previous discussion (the one with
an elastic good) as observed change in price is always lower that change in demand. This
means that change in price or in this case income have a massive influence to change in
demand.
 The high-income elasticity of the product indicates that the lower the expected income of
a consumer the lower the quantity demand of the product. Just like as discussed in the
past if the income is low then demand also decrease so consumers choose inferior goods
over superior goods.
 So we conclude that in order for our product to be in demand; we should lower the price
of such commodities or to be efficient in reducing loss in production, while also lowering
the cost of producing the product

102,000,000

98,000,000

178,093,401 134,875,210

178,093,401

134,875,210 134,875,210-178,093,401
178,093,401 -0.2426x100 24.27%
102,000,000
98,000,000-102,000,000
98,000,000 102,000,000 -0.0392x100 3.92%

24.27%
=6.19
3.92%

HIGHLY ELASTIC

Major adjustment in the business operation that will lead to creating new
strategic changes that would be beneficial in the long term

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