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How rates depends on maturity
Rates depending on maturity. Even though rates with different maturity (all recalculated to a yearly rate) need not be exactly equal, they cannot be too different either. This is particularly true for rates with similar maturity. The seven month rate cannot deviate far from the six month rate since they are fairly close substitutes.
You are the manager of a firm that receives revenues of $40,000 per year from product X and $90,000 per year from product Y. The own price elasticity of demand for product X is -1.
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ALL SELLERS MAY BE TEMPTED TO RAISE THE PRICE OF WHAT THEY SELL, BUT A NEGATIVE UNINTENDED EFFECT OF RAISING THE PRIE COULD BE______ IN UNITS SOLD LARGE ENOUGH TO _____THEIR TOTAL
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