Use the Following to Answer Questions: Table: Willingness to Pay

question 252

Multiple Choice

Use the following to answer questions: Table: Willingness to Pay $$\begin{array} { l c c } \hline { \text { Maximum Willingness to Pay for Good A and Good B } } \\\hline & \text { John } & \text { Mary } \\\hline \text { Good A } & \$ 90 & \$ 35 \\\text { Good B } & \$ 30 & \$ 70 \\\hline\end{array}$$
-(Table: Willingness to Pay) Refer to the table. Assume the firm has zero costs. If the firm were to set individual prices for each of the two goods, how much total profit does it earn from Good B?

• A) $70
• B) $30
• C) $100
• D) $120

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Definitions:

Net Assets

The total value of an entity's assets minus its liabilities, representing the owners' equity.

Assets

Assets are resources owned by a business or individual that have economic value and can be used to meet debts, commitments, or legacies.

Critical Event

A significant occurrence that has a profound impact on an entity's operations, financial performance, or strategic direction.

Revenue Recognition

The accounting principle that outlines the specific conditions under which revenue is recognized and recorded in financial statements.