If There Are No Fixed Costs and Marginal Cost Is

question 18

Multiple Choice

if there are no fixed costs and marginal cost is constant at $44, the price elasticity of demand at the profit-maximizing level of output is closest to

• A)20.39.
• B)25.14.
• C)22.57.
• D)210.29.
• E)20.19.

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Definitions:

Lease of Asset

A contractual agreement where the lessor allows the lessee to use an asset in exchange for periodic payments.

Bargain Purchase Option

A provision in a lease that allows the lessee to purchase the leased asset at the end of the lease term at a price significantly lower than the expected fair market value.

Economic Life

The expected period of time during which an asset remains useful to the owner for its original purpose.

Bonds Payable

Long-term liabilities representing money a company owes to bondholders, to be repaid at a future date.