Suppose That a Technological Advancement Substantially Reduces the Cost of Laser

question 108

Multiple Choice

Suppose that a technological advancement substantially reduces the cost of laser eye surgery. This would cause the equilibrium

• A) price of technology to increase.
• B) quantity of technology to decrease.
• C) quantity of laser eye surgery to increase.
• D) quantity of laser eye surgery to decrease.

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Definitions:

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value.

Redeemed

Redeemed refers to the action of exchanging a financial instrument, such as a bond or preferred stock, for cash or another form of value, often at its maturity or a predetermined price.

Bond

A promissory note issued by a business or a governmental unit.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.