Figure 3-4

question 74

Multiple Choice

Figure 3-4. Botana Company constructed the following formula for monthly utility cost.
Total utility cost = $1,200 + ($8.10 ´ labor hours)
Assume that 775 labor hours are budgeted for the month of April.
Refer to Figure 3-4.Calculate the total variable utility cost for the month of April.

• A)$1,200.00
• B)$7,477.50
• C)$6,277.50
• D)$5,077.50

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Definitions:

Willingness To Pay

The maximum amount a consumer is prepared to spend to acquire a good or service, reflecting its perceived value.

Full Cost

The total expense associated with producing a product or providing a service, including both direct and indirect costs.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Supply Curve

A graphical representation showing how the quantity of goods supplied by producers changes in response to different price levels.