Figure 6.4Japanese Market for Jetliners

question 139

Multiple Choice

Figure 6.4Japanese Market for Jetliners

-Consider the Japanese market for jetliners as depicted in Figure 6.4.Suppose lone producer of jetliners in the world is Boeing and Boeing faces a constant marginal cost of $20 million per jetliner.How much consumer surplus will the Japanese airlines who purchase the jetliners earn from their transactions with Boeing?

• A) 0
• B) $115 million
• C) $230 million
• D) $250 million

Recognize the structure and function of traditional and modern markets.

Analyze the implications of large-scale production and commercial activities on societies and the environment.

Understand the historical development and characteristics of money.

Distinguish between formal and informal economies.

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Definitions:

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment's cost.

Required Return

The minimum rate of return on an investment that is necessary for it to be considered a viable option, taking into account its risk level.

IRR

In capital budgeting, the Internal Rate of Return serves as a tool for estimating the potential returns on investment projects.

Investment

The allocation of resources, usually money, into assets or projects expected to generate future returns or profit.