If Inflation Causes the Cost of Automobiles to Increase by 3.5

question 73

Multiple Choice

If inflation causes the cost of automobiles to increase by 3.5% each year, what should a car cost today if it cost $21,000 4 years ago? Round your answer to the nearest cent. ​

• A)$25,525.63
• B)$24,923.28
• C)$24,462.21
• D)$24,097.98
• E)$23,803.02

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Definitions:

Marginal Revenue Product

The additional revenue generated by employing one more unit of a resource, such as labor.

Productivity

The measure of efficiency in converting inputs into useful outputs in production.

Input Demand Curves

Graphical representations that show the quantity of inputs a firm demands at different input prices.

Rent

Payment, typically made monthly, for the use of land, a building, an apartment, an office, or other property.