The Price of Computers Has Been Dropping for the Past

question 73

Multiple Choice

The price of computers has been dropping for the past ten years. If a desktop PC cost $5,700 ten years ago, and the same computing power cost $410 two years ago, find the rate of decrease per year. (Assume a straight-line model.)

• A) $685.25
• B) $661.25
• C) $611.25
• D) $651.25
• E) $765.25

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Definitions:

Two-Part Tariff

Form of pricing in which consumers are charged both an entry and a usage fee.

Bundling

A marketing strategy that involves offering several products or services for sale as one combined product or service package.

Marginal Cost

The added cost of producing one additional unit of output.

Marginal Revenue

The incremental income achieved by dispensing one more unit of a good or service.