Figure 3-20 Refer to Figure 3-20. If the Price Decreases from $22

question 138

Multiple Choice

Figure 3-20
Refer to Figure 3-20. If the price decreases from $22 to $16, consumer surplus increases by

• A) $120.
• B) $360.
• C) $480.
• D) $600.

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Definitions:

Direct Manufacturing Cost

The total of direct materials and direct labor costs that are tied directly to the production process of a product.

Produced Units

The aggregate quantity of units produced over a defined time frame.

Relevant Range

The scope of business activity levels for which certain cost assumptions and behaviors remain valid.

Indirect Manufacturing Cost

Costs related to manufacturing that cannot be directly linked to specific products, such as maintenance and factory utilities.