Consider the Following Scenario to Answer the Following Questions: the Varsity,located

question 80

Multiple Choice

Consider the following scenario to answer the following questions: The Varsity,located in downtown Atlanta,is the world's largest drive-in restaurant.Located near the Georgia Tech campus,the drive-in attracts two distinct types of customers-college students and visitors to Atlanta.The owners are considering offering a student discount of $1 off their combo meal,which is regularly priced at $9.There are 5,000 students interested in purchasing a combo meal,with a maximum willingness to pay of $8.There are 5,000 visiting customers interested in purchasing the combo meal,with a maximum willingness to pay of $9.Assume that each customer,at most,will purchase a single meal and the marginal cost is $5.
-What is the amount of total consumer surplus if the Varsity offers the combo meal at the single price of $9 per meal?

• A) $20,000
• B) $15,000
• C) $10,000
• D) $5,000
• E) $0

---

Definitions:

Epinephrine

A hormone and neurotransmitter also known as adrenaline, involved in regulating visceral functions (e.g., heart rate) and part of the body's fight-or-flight response.

Body Language

Nonverbal communication through body posture, gestures, facial expressions, and eye movements to convey messages or emotions.

Kinetics

Refers to the branch of science that deals with the effects of forces on the motion of objects.

Kinesis

A movement or activity of a cell or an organism in response to a stimulus, but not directionally oriented toward or away from the source of the stimulus.