Use the Information Below to Answer the Following Questions

question 103

Multiple Choice

Use the information below to answer the following questions.
Fact 1.4.1 Costco
When Costco opened a gas bar just off Highway 401,the neighbourhood was swamped with cars as drivers lined up to get the discount of 10 cents a litre.
-Refer to Fact 1.4.1.The opportunity cost of a litre of gas includes

• A)the time that you would have spent doing something other than lining up to buy a litre of gasoline.
• B)the amount of money that a consumer saves by buying gasoline at Costco.
• C)the 10 cent discount on a litre of gasoline.
• D)the pleasure that motorists receive from buying cheaper gasoline.
• E)the incentive to purchase a full tank of gas.

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Definitions:

Single Price Monopolist

A monopolist that charges all consumers the same price for its product, as opposed to practicing price discrimination.

Profit Area

The part of a business or market where the difference between revenue and costs is positive, indicating financial gain.

Government-Granted Monopolies

These monopolies exist when a government gives exclusive rights to a single firm or entity to provide a good or service, often to ensure stability or to control quality and pricing.

Willingness to Pay

The maximum amount an individual is prepared to sacrifice to procure a good or avoid something undesirable.