The Demand for Fax Machines Has Been Estimated to Be

question 21

Multiple Choice

The demand for fax machines has been estimated to be Q = 1,000 - P + 40L,where P is the price of the machines and L is the average cost of a 10-minute midday call from Los Angeles to New York.At a fax machine price of $400 and a phone call cost of $10,the cross-price elasticity of demand for fax machines with respect to the price of phone service is:

• A) 0.4.
• B) 2.5.
• C) -0.25.
• D) 4.0.
• E) 4.25.

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Definitions:

Tax-exempt Interest

Interest income that is not subject to federal income tax, often received from bonds issued by state and municipalities.

Bonds Issued

Debt securities released by entities such as corporations or governments to raise capital.

Local Government

The administration governing a specific local area such as a city, town, or county, responsible for providing local services and infrastructure and may have its own tax collection policies.

Behavioral Leadership

A leadership style that focuses on understanding and managing the actions and interactions of team members to effectively lead an organization.