If the demand curve is more price inelastic than the supply curve, then a subsidy will benefit: 

A. mainly the consumer. 

B. mainly the producer. 

C. consumers and producers equally. 

D. not possible to determine.

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b) Assume you are an analyst evaluating Mesco Company. The following data are available in your financial analysis (unless otherwise indicated, all data are as of December 31, year 5): (Shs) Retained earnings, December 31m year 4 Gross profit margin ratio Acid-test ratio Noncurrent assets Shs 98,000 25% 2.5 to 1 280,000 45 days 18 days Days sales in inventory Days sales in receivables Sales (all on credit) 920,000 Common stock: sh. 15 per value: 10,000 shares issued and outstanding: issued at sh. 21 per share. Pet = 4 tul Required Using these data, construct the December 31 year 5, balance sheet for your analysis. Operating expenses (excluding taxes and cost of goods sold for year 5) are shs. 180,000. The tax rate is 40%. Assume a 360-day in ratio computations. No cash dividends are paid in either year 4 or year 5. Current assets consist of cash, accounts receivables and inventories. (20 marks) b) Assume you are an analyst evaluating Mesco Company. The following data are available in your financial analysis (unless otherwise indicated, all data are as of December 31, year 5): (Shs) Retained earnings, December 31m year 4 Gross profit margin ratio Acid-test ratio Noncurrent assets Shs 98,000 25% 2.5 to 1 280,000 45 days 18 days Days sales in inventory Days sales in receivables Sales (all on credit) 920,000 Common stock: sh. 15 per value: 10,000 shares issued and outstanding: issued at sh. 21 per share. Pet = 4 tul Required Using these data, construct the December 31 year 5, balance sheet for your analysis. Operating expenses (excluding taxes and cost of goods sold for year 5) are shs. 180,000. The tax rate is 40%. Assume a 360-day in ratio computations. No cash dividends are paid in either year 4 or year 5. Current assets consist of cash, accounts receivables and inventories. (20 marks)

Answer rating: 100% (QA)

If the demand curve is more price inelastic than the supply curve then a subsidy will benefit A main... View the full answer