The Table Below Shows How the Marginal Benefit of Videotape

question 11

Multiple Choice

The table below shows how the marginal benefit of videotape rentals varies for Carol with the number rented per month. The price of each tape rental is reduced from $2.99 to $1 .99.Assuming that the price of a rental accurately reflects the marginal cost to Carol and that she is rational, she will increase the number of tapes rented per month from:

• A)one to two.
• B)two to three.
• C)three to four.
• D)four to five.

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Definitions:

Consolidation Worksheet

A tool used in preparing consolidated financial statements that combines the financials of a parent company and its subsidiaries.

Operating Income

Income generated from regular business operations, excluding non-operating income and expenses, interest, and taxes.

Initial Value Method

An accounting technique where investments are recorded at their original purchase cost, without subsequent adjustment for increases or decreases in value.

Intra-entity Transfers

Transactions of goods, services, or resources between units within the same organization, potentially requiring adjustments for financial reporting.