The Interest Rate Will Be Higher

question 179

Multiple Choice

The interest rate will be higher,

• A)the longer the term of the loan.
• B)the less risk associated with the loan.
• C)the lower the processing costs of the loan.
• D)the lower the administrative costs of the loan.
• E)none of the above

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Definitions:

Marginal Revenue

The additional income gained from selling one more unit of a product or service.

Inelastic Portion

A segment of the demand curve where consumers are relatively unresponsive to price changes, indicating a demand elasticity of less than one.

Marginal Revenue

The additional income earned from selling one more unit of a product or service.

MR = MC

An economic principle stating that profit maximization occurs when marginal revenue equals marginal cost.