If a Good Is Price Inelastic, an Increase in Price

question 8

Multiple Choice

If a good is price inelastic, an increase in price will _____.

• A) increase the firm's total revenue
• B) cause a proportionate increase in costs
• C) lead to a fall in the firm's profits
• D) cause the demand curve to become vertical

Know how to calculate a bond's yield to maturity and yield to call.

Recognize the features and implications of callable bonds and convertible bonds.

Understand the role of bond ratings in assessing default risk.

Describe the impacts of interest rate changes on bonds' market value.

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Definitions:

Production Function

A mathematical model that describes the relationship between inputs used in production and the output of goods or services.

Technically Feasible

A term describing any production process, product, or innovation that can be accomplished with current technology and methodology.

Production Plan

A detailed outline of what products a business will make, the resources required, and the timeline for producing them.

Labor

Human labor, including both cognitive and physical activities, employed in the manufacture of products and provision of services.