Author Question: The longer you have to wait to receive a payment, A) the lower the interest rate you will charge ... (Read 121 times)

jace · **on:** Jun 29, 2018

The longer you have to wait to receive a payment,

A) the lower the interest rate you will charge on the payment.
B) the more you are willing to discount the payment.
C) the greater value it will have to you.
D) the less value it will have to you.

Question 2

Explain using price elasticity of demand why air conditioning manufacturers would actually have sales in the middle of the summer when customers have the most acute need? Explain this apparent paradox.

What will be an ideal response?

janeli1 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D

Answer to Question 2

During the winter months customers can postpone their decision to buy an air conditioner. So it would seem that manufacturers would not offer sales in the summer when customers can least afford to postpone their decision. But the reason that they do is that during the summer there is increased competition and manufacturers realize that you have choices. These choices lead to an increase in the price elasticity of demand.