The Market for Strawberries Is Perfectly Competitive

question 3

Multiple Choice

The market for strawberries is perfectly competitive.Joe and Haley each purchase 3 boxes of strawberries.Joe's demand is much more elastic than Haley's.Which statement is true?

• A)Joe's consumer surplus exceeds Haley's.
• B)Haley's consumer surplus equals Joe's.
• C)Haley's consumer surplus exceeds Joe's.
• D)Joe receives no consumer surplus.
• E)Neither Joe nor Haley receive any consumer surplus.

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Definitions:

Business Firm

A Business Firm is an organization engaged in commercial, industrial, or professional activities with the aim of generating profits.

Drawing Account

An account used to record withdrawals made by a company’s owner for personal use, which is then deducted from the company’s capital.

Owner's Capital Account

Represents the total equity or net worth of an individual owner in a company, detailing the contributions, earnings, and withdrawals of the owner.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, leading to the net income or loss for the period.