Assume the Demand Function for Skin Care Products Is Given

question 23

Multiple Choice

Assume the demand function for skin care products is given by Q = 1,000 - 20 P + 5I. If P=$25 and I=$1,000 currently, then:

• A) skin care products are a normal good.
• B) the elasticity of demand is equal to 11.
• C) skin care products are inferior.
• D) The price is too high

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Definitions:

Operating Assets

Assets used in the day-to-day operations of a business, such as machinery, buildings, and equipment, that contribute to revenue generation.

Operating Costs

The expenses associated with the operation of a business, excluding costs associated with production.

Working Capital

The difference between a company’s current assets and current liabilities, indicating its short-term financial health and operational efficiency.

Net Present Value

A calculation used to assess the profitability of an investment, considering the present value of its future cash flows minus the initial investment.