In Figure 20

question 10

Multiple Choice

In Figure 20.1, total revenue is maximized at the unit price of

• A) $50.
• B) $60.
• C) $80.
• D) $100.

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Definitions:

Rule Of 70

A method used to estimate the number of years it will take for a variable to double, calculated by dividing 70 by the annual growth rate.

Interest Rate

The proportion of a specified sum that is added as a charge for borrowing it, usually stated as an annual rate.

Utility Function

A mathematical representation describing how a consumer ranks different bundles of goods according to levels of satisfaction.

Risk Averse

A preference for guaranteed outcomes over those with uncertainty, even if the uncertain outcomes might offer a higher expected return.