This Table Refers to Five Possible Buyers' Willingness to Pay

question 40

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. If the market price is R38.00,

• A) David's consumer surplus is R47.00 and total consumer surplus for the five individuals is R95.00.
• B) Megan's consumer surplus is R17.00 and total consumer surplus for the five individuals is R96.00.
• C) David, Laura, and Megan will be the only buyers of a take-away meal.
• D) The demand curve for the take-away meal, taking the five individuals into account, is horizontal.

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Definitions:

Overhead Application Rate

A rate used to allocate overhead costs to products or cost objects based on a predetermined formula.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing or producing a company's products.

Budgeted Overhead

Forecasted costs associated with running a company that are not directly tied to a specific product or service.

Actual Overhead

The actual amount of overhead costs incurred by a company during a specific period.