The Amount of Interest Owed on a Loan of $2,000

question 39

Multiple Choice

The amount of interest owed on a loan of $2,000 after a year at an interest rate of 10 percent is:

• A) $2,100.
• B) $2,200.
• C) $200.
• D) $100.

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Definitions:

Vertical Contracts

Agreements between firms at different levels in the supply chain (e.g., manufacturer and retailer) to govern the terms of sale or purchase.

Costly Activities

Actions or processes that require a significant amount of resources, such as time, money, or effort.

Retailers

Businesses or individuals that sell goods directly to consumers.

Double Marginalization

A situation where both the upstream and downstream firms in a supply chain exert market power, leading to higher prices for consumers.