If Inflation Causes the Cost of Automobiles to Increase by 3.5

question 73

Multiple Choice

If inflation causes the cost of automobiles to increase by 3.5% each year, what should a car cost today if it cost $21,000 4 years ago? Round your answer to the nearest cent. ​

• A)$25,525.63
• B)$24,923.28
• C)$24,462.21
• D)$24,097.98
• E)$23,803.02

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Definitions:

Pure Strategy

Strategy in which a player makes a specific choice or takes a specific action.

Optimal Response

Optimal response is a strategy that maximizes a player's benefits given the strategies chosen by others, commonly used in game theory.

Nash Equilibrium

A concept in game theory where no player can gain by unilaterally changing their strategy if the strategies of others remain unchanged.

Pure Strategy

In game theory, a strategy where a player consistently chooses a specific action.