If Apple's ITunes Music Store Increases Its "Fee" for Its

question 3

Multiple Choice

If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that

• A) the number of iTunes music downloads would increase.
• B) there would be no change in the demand for iTunes music downloads.
• C) the number of iTunes music downloads would decrease.
• D) iTunes music supply would change but demand would not.

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Definitions:

Net Present Value

A valuation method used to estimate the attractiveness of an investment, by calculating the present value of expected future cash flows minus the initial investment cost.

Cash Flow

The overall volume of cash and cash-equivalents that are exchanged in and out of a business entity.

Timing

The selection of an optimal time or period for making an investment, launching a product, or executing a decision to maximize benefits or outcomes.

Capital Budgeting

The process of planning and evaluating investments in long-term assets, analyzing their expected cash flows and their impact on the company's financial future.