Suppose That the Demand for a Product Depends on the Price

question 147

Multiple Choice

Suppose that the demand for a product depends on the price p according to , where p is in dollars. Find and explain the meaning of the instantaneous rate of change of demand with respect to price when . ​

• A) -5.00. If price increases by $1, the demand will decrease approximately 5.00 units.
• B) 5.00. If price increases by $1, the demand will increase approximately 5.00 units.
• C) -10.00. If price increases by $1, the demand will decrease approximately 10.00 units.
• D) -65.67. If price increases by $1, the demand will increase approximately 65.67 units.
• E) 10.00. If price increases by $1, the demand will decrease approximately 10.00 units.

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Definitions:

Significant Influence

The capacity, through investment ownership, to impact the management and policies of another company without having full control.

Net Income

The consummate earnings of a company following the subtraction of all operational costs and tax liabilities from its gross revenue.

Dividends

Payments made by a corporation to its shareholders, usually from profits.

Equity Method

An accounting technique used by companies to assess the profits earned by their investments in other companies, where the investment is recorded initially at cost and adjusted thereafter for the post-acquisition change in the investor's share of the investee's net assets.