(Figure: Consumer Surplus II) Suppose That a Firm Offers Customers

question 7

Multiple Choice

(Figure: Consumer Surplus II) Suppose that a firm offers customers either (1) the ability to buy any quantity they desire for $24 per unit or (2) a price of $18 per unit for 15 or more units. Consumer surplus under the quantity discount is _____ than under the $24-per-unit pricing scheme, so the plan to charge these types of consumers a price of $24 per unit is _____ compatible.

• A) $64 more; incentive
• B) $32 less; not incentive
• C) $53 less; incentive
• D) $41 more; not incentive

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Definitions:

Binocular Rivalry

A phenomenon of visual perception in which perception alternates between different images presented to each eye.

Linear Perspective

A technique in art and photography that creates the illusion of depth and distance on a flat surface utilizing converging parallel lines.

Monocular Cues

Visual information that allows for the perception of depth and distance using one eye alone.

Binocular

Related to the use of both eyes, which allows for depth perception and a wider field of view compared to vision using one eye alone.