An Individual Buys More of a Good at Lower Prices

question 163

Multiple Choice

An individual buys more of a good at lower prices than at higher prices because

• A)at lower prices, total utility is greater than price.
• B)at lower prices, marginal benefit is greater than price over a greater quantity of the good than at higher prices.
• C)at lower prices, marginal utility is greater than price over a greater quantity of the good than at higher prices.
• D)marginal benefit increases.
• E)marginal benefit falls more slowly than price.

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Definitions:

Actual Sales

The exact amount of sales revenue that a company has generated over a specific period, as opposed to projected or forecasted sales.

High-Low Method

A technique used in cost accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.

Mixed Cost

Mixed cost refers to a cost that contains both variable and fixed cost elements, meaning it changes with the level of activity but not directly proportionate.

Activity Level

The volume of work or output produced, often used in costing and budgeting processes to measure levels of operations.