Suppose the Market Price Is $5

question 139

Multiple Choice

Suppose the market price is $5. The buyer who buys the first unit of output has a willingness-to-pay equal to $10; the buyer who buys the second unit of output has a willingness-to-pay equal to $9; and the buyer who buys the third unit of output has a willingness-to-pay equal to $8. Total consumer surplus is

• A) $27.
• B) $10.
• C) $5.
• D) $12.

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Definitions:

Account Nature

Refers to the classification of an account as either an asset, liability, equity, revenue, or expense.

Recorded Voucher

A documented voucher that has been entered into a financial accounting system.

Periodic Inventory Method

An accounting method that calculates the cost of goods sold and ending inventory levels at the end of an accounting period by conducting a physical count.

Payroll Department

The Payroll Department is responsible for managing employee compensation, including calculating wages, withholding taxes, and distributing paychecks.