Use the Following to Answer Question

question 7

Multiple Choice

Use the following to answer question:
Table 10.2
-(Table 10.2) Suppose that Honda prices the Pilot 4WD LX at $30,000 and the Pilot 4WD Touring at $40,000. Are these prices incentive-compatible?

• A) No, the less price-sensitive consumer receives more consumer surplus from the LX version.
• B) Yes, each consumer type receives the highest consumer surplus from buying the car designed for its group.
• C) No, the highly price-sensitive consumer receives more consumer surplus from the LX version.
• D) Yes, each consumer type receives the lowest consumer surplus from buying the car designed for its group.

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Definitions:

Nonimportation Movement

A series of commercial restrictions adopted by American colonists to protest British policies before the American Revolution, specifically targeting goods imported from Britain.

Grenville

Was a British Whig statesman who served as Prime Minister of Great Britain in the mid-18th century, known for his policy of taxing the American colonies, leading to unrest.

British Troops

Military forces from the United Kingdom, involved in various historical and contemporary conflicts and peacekeeping missions around the world.

Lord North

A British statesman who served as Prime Minister from 1770 to 1782, notably during a significant portion of the American Revolutionary War.