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

question 98

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.
-If the Varsity decides to practice price discrimination,what will be the amount of consumer surplus if it charges most customers $9 for a standard combo meal,but charges a reduced price of $8 for only those customers who show their student identification cards?

• A) $0
• B) $500
• C) $1,000
• D) $2,500
• E) $5,000

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Definitions:

Labor Supply

The total hours that workers are willing and able to work at a given wage rate in a specific time period.

Realistic Job Preview

Background information about a job's positive and negative qualities.

On-Campus Interviewing

A recruiting process where employers visit colleges and universities to conduct interviews with students for potential employment opportunities.

Public Employment Agencies

Government-funded agencies that provide job search assistance, employment counseling, and sometimes training to job seekers.