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The Stages in the Life of a Transaction Exposure Can

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The stages in the life of a transaction exposure can be broken into three distinct time periods. The first time period is the time between quoting a price and reaching an actual sale agreement or contract. The next time period is the time lag between taking an order and actually filling or delivering it. Finally, the time it takes to get paid after delivering the product. In order, these stages of transaction exposure may be identified as:


Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specified period.

Perfectly Price-inelastic

A situation where the quantity demanded of a good does not change regardless of changes in its price.

Price-inelastic

Referring to a situation where demand or supply for a good or service is relatively unresponsive to changes in price.

Total Revenue

The aggregate income a company generates from its sales of products or delivery of services over a designated period.

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