VoiceSys, Inc

question 65

Multiple Choice

VoiceSys, Inc. produces voice-mail switchboard systems used in large office buildings, hotels, and other facilities. VoiceSys's products are selling so well that it has decided to buy new equipment that will increase its production capacity. This example best illustrates

• A) why the demand for a particular seller's equipment is inelastic.
• B) derived demand.
• C) why the industry demand for this kind of equipment is quite elastic.
• D) that the market for installations is a "boom or bust" business.
• E) All of the above are true.

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Definitions:

Sunk Cost

Expenses that have already been incurred and cannot be recovered, and should not affect future business decisions.

Net Present Value

Net Present Value (NPV) is a financial metric that calculates the value of a series of cash flows by discounting them back to the present-day using a specific discount rate.

Electronic Transmission

The process of transferring data or documents over electronic networks, such as the internet or email.

Initial Investment

Initial investment refers to the amount of money used to start a business venture, purchase capital assets, or invest in a project.