Scenario 19

question 199

Multiple Choice

Scenario 19.1 Use the following to answer the questions.Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
-Refer to Scenario 19.1. If Concession Supply increased its price by 10 percent and experienced only a 2 percent decrease in the demand for hotdogs, the demand would be

• A)inelastic.
• B)common.
• C)prestige.
• D)elastic.
• E)marginal.

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Definitions:

Subprime Mortgages

These are home loans granted to borrowers with lower credit ratings, implying higher risk for the lender and typically coming with higher interest rates.

Down Payments

A down payment is the initial, upfront portion of the total amount due, often associated with the purchase of expensive items like a home or a car, which is not financed through a loan.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.

Investment Banks

Financial institutions that provide services such as underwriting, mergers and acquisitions, and advisory services to corporations and governments.