Scenario 12-2 Suppose Roger and Regina Receive Great Satisfaction from Their Consumption

question 122

Multiple Choice

Scenario 12-2
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-2.How much total consumer surplus do Regina and Roger collectively receive from consuming cheesecake?

• A) $3
• B) $6
• C) $9
• D) $13

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Definitions:

Straight-line Method

A depreciation method that allocates an equal portion of the cost of a fixed asset to each year of its useful life.

Troubled Debt Restructuring

The process of modifying the terms of a debt agreement due to the debtor’s financial difficulties to enhance the likelihood of repayment.

Extraordinary Gains

Gains that are both unusual and infrequent in nature, typically reported separately in financial statements to provide clarity on a company's ordinary income.

Settlement

The resolution of a transaction or dispute, involving the transfer of funds or assets, or the fulfillment of contractual obligations.