You Have the Opportunity to Make a One-Time Sale If

question 376

Multiple Choice

You have the opportunity to make a one-time sale if you will give a new customer 30 days to pay. You suspect that there is a 50 percent chance that this person will never pay you. The sales price of
The item the customer wants to buy is $325. Your variable cost on that item is $219 and your
Monthly interest rate is 1 percent. You _____ grant credit because the net present value of the sale
Is _____.

• A) should; $105
• B) should; $109
• C) should not; -$58
• D) should not; -$47
• E) should not; -$33

Understand the effects of externalities in economic transactions and the concept of social cost versus social benefit.

Grasp the notion of consumer, producer surplus, and efficiency loss and relate them to market dynamics.

Identify how private businesses can mitigate information problems in the marketplace.

Analyze the impact of government policies on market dynamics, focusing on insurance markets and information symmetry.

---

Definitions:

Marginal Revenue

The profit increment a business achieves through the sale of one extra unit of its offerings.

Macaws

Large, brightly colored parrots with long tails and powerful beaks, native to Central and South America.

Monopoly

A market structure characterized by a single seller dominating the entire market, often resulting in limited consumer choice and higher prices.

Elastic

Describes a situation where the demand or supply for a product or service significantly changes in response to price changes.