The Development of MP3 Players That Significantly Reduce the Market

question 27

Multiple Choice

The development of MP3 players that significantly reduce the market for CDs and DVDs would be an example of:

• A)specialization.
• B)derived demand.
• C)roundabout production.
• D)creative destruction.

---

Definitions:

Earnings Before Interest And Taxes (EBIT)

A measure of a firm’s performance without regard to how it is financed.

Net Working Capital

A measure of a company's liquidity, calculated as the difference between its current assets and current liabilities.

Total Equity

The financial value representing the amount of money that would be returned to shareholders if all the assets were liquidated and all the company's debts were paid off.

Progressive Tax System

A tax system where the tax rate increases as the taxable amount or income increases.