Your Forecast Shows $500,000 Annually in Sales for Each of the Next

question 90

Multiple Choice

Your forecast shows $500,000 annually in sales for each of the next 3 years.If your second and third year predictions have failed to incorporate 2.5% expected annual inflation,how far off in total dollars is your 3-year forecast?

• A) $37,813
• B) $50,000
• C) $52,550
• D) $76,250

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Definitions:

Price Floor

A price floor is a government- or group-imposed price control that prevents a price from falling below a certain level, ensuring producers receive a minimum payment for their goods or services.

Perfectly Elastic

A situation in demand or supply where the quantity demanded or supplied changes infinitely in response to any change in price.

Perfectly Inelastic

Describes a market scenario where the demand or supply for a product remains unchanged even when the price changes.

Elasticity

A measure of how much the quantity demanded or supplied of a good or service changes in response to a change in its price.