Use the Following to Answer Question

question 37

Multiple Choice

Use the following to answer question:
Figure 10.11
-(Figure 10.11) If a firm uses a two-part tariff pricing strategy, the entrance fee is _____ and the per-unit price is _____.

• A) $12; $8
• B) $8; $12
• C) $16; $8
• D) $8; $16

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Definitions:

Yield Falls

A situation where the yields on bonds decrease, which typically occurs when bond prices increase.

Convexity

A measure of the curvature or the degree of the curve in the relationship between bond prices and bond yields.

Basis Points

A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument; one basis point is equivalent to 0.01%.

Predicted New Price

An estimation of a security's future price based on various factors, including market trends, economic indicators, and company performance.