Solve the Problem $$\mathrm { H } ( \mathrm { x } ) = \left( \frac { \mathrm { I } } { \mathrm { P } } \right) ( \mathrm { x } )$$

question 67

Multiple Choice

Solve the problem.
-Suppose that P(x) represents the percentage of income spent on housing in year x and I(x) represents income in year x. Determine a function H that represents total housing expenditures in year x.

• A) H(x) = (P · I)(x)
• B) H(x) = (P + I)(x)
• C) \[\mathrm { H } ( \mathrm { x } ) = \left( \frac { \mathrm { I } } { \mathrm { P } } \right) ( \mathrm { x } )\]
• D) H(x) = (I - P)(x)

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Definitions:

Price Discrimination

The strategy of selling the same product or service at different prices to different customers, based on their willingness to pay.

Natural Monopoly

A market condition where a single firm can supply a good or service to an entire market at a lower cost than could be achieved by multiple firms.

Profit-Maximizing

A strategy or process whereby a firm adjusts its production and pricing to achieve the highest possible profit.

Linear Demand Curve

A linear demand curve depicts a direct, inverse relationship between the price of a product and the quantity demanded, represented graphically as a straight line.