Suppose a New Oxygen-Enrichment Process Will Cut in Half the Energy

question 64

Multiple Choice

Suppose a new oxygen-enrichment process will cut in half the energy required to smelt copper. The firm selling licenses for this patented process will experience a greater demand for its product when

• A) the price of copper falls and smelters become more desperate to economize.
• B) energy prices are expected to fall.
• C) energy prices are expected to rise.
• D) the price of steel, a substitute for copper, declines.

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Definitions:

Finished Goods

Products that have completed the manufacturing process and are ready for sale to customers.

Transportation Costs

Expenses associated with the movement of goods or materials from one location to another.

Sales Commissions

A form of compensation to salespersons for their sales achievements, usually calculated as a percentage of the sales they generate.

Net-of-Tax Basis

A method of presenting financial figures after the effect of taxes has been considered or deducted.