(Figure: Interpreting Demand Curves) in the Demand Curve Shown, an Increase

question 251

Multiple Choice

(Figure: Interpreting Demand Curves) In the demand curve shown, an increase in price from $1 to $2 will

• A) cause quantity demanded to rise from 20 to 30 units.
• B) cause quantity demanded to fall from 30 to 20 units.
• C) have no impact on sales.
• D) make buyers angry.

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Capital Investments

Funds spent by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment to increase its long-term revenue.

Discounting Techniques

Methods used in finance to determine the present value of future cash flows or income.

Interest Rate

The proportion of an amount of money that is charged for borrowing or using it, usually represented as a yearly percentage.