(Consider This) Augi Is the Hottest New Pop Singer, but Her

question 113

Multiple Choice

(Consider This) Augi is the hottest new pop singer, but her agent discovers that Internet sales of Augi's music have been poor due to Internet piracy.However, concerts are regularly sold out and merchandise (such as T-shirts) sells well.If Augi wants to enhance profits, economists would most likely recommend that she

• A)charge more for downloads, concerts, and merchandise.
• B)cut prices for downloads, concerts, and merchandise.
• C)only give concerts.
• D)keep prices of downloads low and raise prices for concerts and merchandise.

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Definitions:

Contra-Asset

An account on the balance sheet that reduces the value of an associated asset, such as accumulated depreciation.

Payroll Taxes

Fees applied to employers and employees, typically based on a percentage of the salaries paid by employers to their employees.

Employer's Portion

The part of payroll taxes and benefits expenses that an employer is responsible for, as opposed to the portion paid by employees.

Gross Earnings

The total income earned by an individual or business before any deductions or taxes are applied.