Shirley Adds $2,000 to Her Savings on the Last Day

question 33

Multiple Choice

Shirley adds $2,000 to her savings on the last day of each year. Shawn adds $2,000 to his savings on the first day of each year. They both earn an 8% rate of return. What is the difference in their
Savings account balances at the end of 35 years?

• A) $26,801.89
• B) $26,882.60
• C) $27,570.69
• D) $27,432.74
• E) $29,776.34

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Definitions:

Natural Monopoly

A type of monopoly that exists due to the high cost or complexity of operating in a specific industry, which effectively prevents other competitors.

Monopoly Inefficiency

The loss of economic efficiency that occurs when a single firm controls the market, leading to higher prices and lower product quantity or quality than in competitive markets.

Perfect Price Discrimination

A market strategy where a seller charges each buyer their maximum willingness to pay, capturing the entire consumer surplus as profit.

Willingness-to-Pay

The maximum amount a consumer is prepared to spend on a good or service.