Business / Economics / Finances

ExpensesCostsVariable costs$4,500,000Actual Depreciation$60,000Salary$50,000Loan interest$30,000Total Expenses for the period$4,640,000Revenues Accrued$5,000,000Estimated Profits Annually$360,000

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Economics

The estimated revenues from other investments form the sale of the farm is 10% of the costs of the farm: Market value of the farm = $4,000,000*10% = $400,000.this value is higher in comparison to the amounts accrued form the activities of his own farm. However, some considerations are applicable such as He accrued a salary of $50,000 and profits of $360,000, which translates to 410,000 annually. He should retain his farm as he is able to make individual decisions and maintain autonomy in terms of conduct of activities as well as is personal far. Furthermore, the economic benefits exceed the expected benefits form the sale of the farm. Additionally, his farm could increase in value given possibility of increases in real estate values.

2. Price = US $ 1,500. Quantity demanded in Mexico = Q = 3,500 – 2P, P=1,500.

Q= 3,500-3,000, Quantity in Mexico= 500. Sales in Brazil, Argentina and Chile are identical to Mexico. Hence Quantity= 500*3= 1500

•Revenue from the three countries: 1500*1500= $2,250,000

•Price elasticity of Demand= (%change in quantity Demanded)/ (%change in price)

PEoD= there is no price elasticity of demand as the prices of the products and demand for the product remained constant.

• 10% increase in price reflects on the demand of the product.

The estimated revenues from other investments form the sale of the farm is 10% of the costs of the farm: Market value of the farm = $4,000,000*10% = $400,000.this value is higher in comparison to the amounts accrued form the activities of his own farm. However, some considerations are applicable such as He accrued a salary of $50,000 and profits of $360,000, which translates to 410,000 annually. He should retain his farm as he is able to make individual decisions and maintain autonomy in terms of conduct of activities as well as is personal far. Furthermore, the economic benefits exceed the expected benefits form the sale of the farm. Additionally, his farm could increase in value given possibility of increases in real estate values.

2. Price = US $ 1,500. Quantity demanded in Mexico = Q = 3,500 – 2P, P=1,500.

Q= 3,500-3,000, Quantity in Mexico= 500. Sales in Brazil, Argentina and Chile are identical to Mexico. Hence Quantity= 500*3= 1500

•Revenue from the three countries: 1500*1500= $2,250,000

•Price elasticity of Demand= (%change in quantity Demanded)/ (%change in price)

PEoD= there is no price elasticity of demand as the prices of the products and demand for the product remained constant.

The estimated revenues from other investments form the sale of the farm is 10% of the costs of the farm: Market value of the farm = $4,000,000*10% = $400,000.this value is higher in comparison to the amounts accrued form the activities of his own farm. However, some considerations are applicable such as He accrued a salary of $50,000 and profits of $360,000, which translates to 410,000 annually. He should retain his farm as he is able to make individual decisions and maintain autonomy in terms of conduct of activities as well as is personal far. Furthermore, the economic benefits exceed the expected benefits form the sale of the farm. Additionally, his farm could increase in value given possibility of increases in real estate values.

2. Price = US $ 1,500. Quantity demanded in Mexico = Q = 3,500 – 2P, P=1,500.

Q= 3,500-3,000, Quantity in Mexico= 500. Sales in Brazil, Argentina and Chile are identical to Mexico. Hence Quantity= 500*3= 1500

•Revenue from the three countries: 1500*1500= $2,250,000

•Price elasticity of Demand= (%change in quantity Demanded)/ (%change in price)

PEoD= there is no price elasticity of demand as the prices of the products and demand for the product remained constant.