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    Economics Question for M. com Question paper 2017

    Want a solution to some economics questions of M.Com papers? Searching for answers or tips to solve the problems? Here, on this page you can get answers to the rate of growth and the highest possible sales.

    Q. Redstone Company is currently in a phase of output expansion. Its sales - price relationship is given by 5p^2 +S =0 where p denotes price and S denotes sales. The CEO needs to ascertain the rate of growth of the company s'sales at an output level of 50. The company s' economist highlights this rate as 20%. Justify the Economist s' finding in this behalf. At which output level, does the company attain its highest possible sales? ?
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    3 Answers found.
  • The company's sales growth rate is determined by the differential of the current year net sales and previous years net sales.

    When we say net sales it means that the sales minus any returns or claim for damages.

    For an output level of 50 let us assume that net sales level is 40.

    So using the equation Sales growth = (current net sales - previous year net sales)/previous year net sales*100, for an anticipated growth of 20% we get previous year net sale approx equal to at 33 level.

    So company can comfortably go to gross level of 50 without any price change but can still go up in output if there is a margin in price reduction and that output value will be governed by the price sales equation.

    Knowledge is power.

  • Company growth sales is the amount by which the average volume sales of the company product and services has grown typically from year to year. To calculate expected growth rate apply the growth rate formula. Simply insert your past and present values into the following formula :
    Present = past/past. You'll get fraction as an answer and divide this fraction to get a decimal value. Express your decimal answer as an percentage.

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