The Probability That House Sales Will Increase in the Next

question 46

Multiple Choice

The probability that house sales will increase in the next 6 months is estimated to be 0.25.The probability that the interest rates on housing loans will go up in the same period is estimated to be 0.74.The probability that house sales or interest rates will go up during the next 6 months is estimated to be 0.89.The probability that neither house sales nor interest rates will increase during the next 6 months is:

• A)0.11
• B)0.195
• C)0.89
• D)0.90

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Definitions:

Maximize Profits

The process of making the highest possible profit from business operations.

Relatively Inelastic

Describes a situation where the demand or supply of a good or service changes minimally in response to changes in price.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one additional unit of a good changes as production volume increases.

Marginal Revenue Curve

A graphical representation showing how a firm's revenue changes with each additional unit of output sold, typically declining in perfectly competitive markets.