This Table Refers to Five Possible Buyers' Willingness to Pay

question 52

Multiple Choice

This table refers to five possible buyers' willingness to pay for a take-away meal.
$\begin{array}{l}\text { Buyer Willingness To }\\\begin{array} { l l } & \text { Pay } \\\text { David } & \text { R85.00 } \\\text { Laura } & \text { R70.00 } \\\text { Megan } & \text { R55.00 } \\\text { Mallory } & \text { R40.00 } \\\text { Audrey } & \text { R35.00 }\end{array}\end{array}$
-Refer to the table above. Which of the following is not true?

• A) At a price of R90.00, no buyer is willing to purchase take-away meal.
• B) At a price of R55.00, Megan is indifferent between buying a take-away meal and not buying one.
• C) At a price of R40.00, total consumer surplus in the market will be R90.00.
• D) All of the above are correct.

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Definitions:

Net Operating Income

An accounting term representing the profit derived from a company's everyday, non-financial activities and excluding extraordinary items.

CVP Analysis

Short for Cost-Volume-Profit Analysis, it's a management accounting technique used to analyze how changes in costs and volume affect a company’s operating income and net income.

Sales Mix

The combination of different products or services that a company sells, significantly impacting its profitability due to differing margins on each item.

Break-Even Point

The volume of production or sales at which total revenues equal total expenses, with no profit or loss.