In Problem 1, If Demand in the United States Is

question 5

Multiple Choice

In Problem 1, if demand in the United States is given by Q₁ = 13,200 - 600p₁, where p₁ is the price in the United States, and if the demand in England is given by 9,000 - 500p₂, where p₂ is the price in England, then the difference between the price charged in England and the price charged in the United States will be

• A) $4.
• B) $2.
• C) $0.
• D) $12.
• E) $6.

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Definitions:

Leasing NET Advantage

The financial benefit that results from leasing an asset rather than purchasing it, taking into account all costs and savings.

CCA Class

Categorization within the Capital Cost Allowance system in Canada that determines the depreciation rate for tax purposes on assets.

Tax Rate

The amount of money, in terms of a percentage, that the government collects as tax from enterprises or persons.

Cost Of Debt

The return that lenders require on the firm’s debt.