Suppose a Downward-Sloping Demand Curve Intersects the Horizontal Axis at a Point

question 99

Multiple Choice

Suppose a downward-sloping demand curve intersects the horizontal axis at a point where quantity demanded equals 1250 units.What is the "value" that consumers place on the 1250th unit of this good?

• A)a negative value
• B)a positive value
• C)$0
• D)$1250
• E)it depends on the position of the supply curve

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Definitions:

Fair Value

The price at which an asset could be bought or sold or a liability settled, between knowledgeable, willing parties in an arm's length transaction.

Variable Interest Entity

A legal entity in which an investor holds a controlling interest that is not based on the majority of voting rights.

Consolidation

The process of combining financial information from several departments or subsidiaries within a company into a single financial statement.

Controlling Financial Interest

A situation where an entity has the power to govern the financial and operating policies of another entity so as to benefit from its activities.