Ash Ltd Produces Commercial Glass Using Silica as a Raw Material

question 80

Multiple Choice

Ash Ltd. produces commercial glass using silica as a raw material. Assuming that the firm wants to maximize profits, when the price of silica falls, the firm will _____.

• A) shut down production completely
• B) continue to produce the same level of output
• C) use substitutes for silica in production
• D) increase the level of output produced

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Definitions:

Annual Interest

The amount of interest due over the course of a year as a result of borrowing funds or investing, expressed typically as a percentage of the principal.

Accumulate

The process of gathering or amassing items, such as profits, expenses, or information, over a period of time.

Present Value

The present worth of a future amount of money or series of cash flows, taking into account a certain rate of return.

Annuity

An economic product that delivers a constant payment stream to an individual, mainly used as a means of livelihood for people who are retired.