Use the Information Below to Answer the Following Questions

question 47

Multiple Choice

Use the information below to answer the following questions:
Highrise Constructions Ltd had a large 3-year project with total revenue of $5,000,000 and estimated total costs of $4 200,,000. The project was 25% complete at the end of the first year, 55% complete at the end of the second year, and 100% complete at the end of the third year. Revenues and costs were as estimated.
-What profit was earned during the third year if the completion of production method was used?

• A) $360 000
• B) $440 000
• C) $800 000
• D) $400 000.

---

Definitions:

Demand Function

A mathematical representation that describes the relationship between the quantity of a good that consumers are willing and able to purchase at various prices, holding other factors constant.

Income Elasticity

A measure of how much the demand for a product changes in response to a change in consumers' income.

Income Elasticity

A measure of how the quantity demanded of a good or service changes in response to a change in consumer income.

Inferior Good

A type of good for which demand decreases when consumers' income increases, opposite to normal goods.