Use the Following to Answer Question(s): Measuring Consumer Surplus

question 205

Multiple Choice

Use the following to answer question(s) : Measuring Consumer Surplus

-(Exhibit: Measuring Consumer Surplus) If pizzas are $6 each, your consumer surplus is:

• A) $24.
• B) $16.
• C) $8.
• D) $4.

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Definitions:

Marginal Revenue

The additional income that a company generates from selling one more unit of a good or service.

Average Variable Cost

The per-unit variable cost of production, calculated by dividing total variable costs by the quantity of output produced.

Long-Run Scale

Refers to the time period in which all factors of production and costs are variable, allowing companies to adjust all inputs in response to market conditions.

Short-Run

A period in which at least one input is fixed, limiting the firm's capacity to adjust to changes in demand or market conditions.