A Snowplow Will Generate a Net Income of $2,000 Per

question 45

Multiple Choice

A snowplow will generate a net income of $2,000 per year for its owner.After 8 years,the plow will break down and have zero value.The maximum amount of money anyone would pay for the plow is

• A)less than $2,000
• B)$2,000
• C)between $2,000 and $16,000
• D)$16,000
• E)more than $16,000

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Definitions:

Marginal Costs

The increase in aggregate expenses due to the production of an additional unit of a good or service.

Industry Output

The total production or supply of goods and services produced by a specific industry within a certain period.

Profit

The financial gain achieved when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Game Theory

The study of behavior in situations of interdependence. Used to explain the behavior of an oligopoly.