Your On-Line Bookstore Is in Direct Competition with Amazon

question 41

Essay

Your on-line bookstore is in direct competition with Amazon.com, BN.com, and Borders.com. Your company s daily revenue in dollars is given by where x , y , and z are the online daily revenues of Amazon.com, BN.com, and Borders.com, respectively. If Amazon.com and BN.com each show a daily revenue of $2,000, give an equation showing how your daily revenue depends on that of Borders.com.

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Definitions:

Nominal Interest Rate

The interest rate as stated without adjustment for inflation, representing the actual percentage amount charged for borrowing money.

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a given period of time.

Nominal Interest Rate

The percentage increase in money that borrowers pay to lenders, not adjusted for inflation.

Real Interest Rate

The interest rate adjusted for inflation, representing the true cost of borrowing and the real yield to savers and investors.