A Deposit of $10,000 Is Made Today

question 12

Multiple Choice

A deposit of $10,000 is made today.Semi-annual withdrawals of $R are made for 15-years,first withdrawal made 6-months from today.The fund earns interest at j₂ = 10% for the first 6-years and j₂ = 6% thereafter.What is R?

• A)$618.93
• B)$605.26
• C)$540.26
• D)$442.15

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Definitions:

Dominant Firm

A company that has a large majority share of the market and can significantly influence the market price and competition.

Market Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and the price of the good.

Profit-maximizing Output

The level of production at which a business achieves the highest possible profit.

Cournot Model

An economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide upon independently of each other and at the same time.