Suppose That You Are in Charge of Pricing at a Local

question 133

Multiple Choice

Suppose that you are in charge of pricing at a local surf rental shop.The business needs to increase revenue and your job is on the line.If the supply of surf boards is elastic, you:

• A)should increase the rental price of surf boards
• B)should decrease the rental price of surf boards
• C)should not change the rental price of surf boards
• D)cannot determine what to do with rental price until you determine whether demand is elastic or inelastic

---

Definitions:

Operating Costs

Expenditures that are necessary for the day-to-day operations of a business, including costs related to manufacturing, sales, and administration.

Interest Charges

Interest charges are the costs incurred by an entity for borrowing money, quantified as a percentage of the principal loan amount.

Assets

Economic resources or owned items of value that an individual, corporation, or country possesses, expected to provide future benefits.

Net Income

Net income refers to the total earnings of a company once all costs, expenses, and taxes are deducted from the overall revenue.