Table 7-3 For Each of Three Potential Buyers of Oranges, the Table

question 9

Multiple Choice

Table 7-3
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

-Refer to Table 7-3.Who experiences the largest gain in consumer surplus when the price of an orange decreases from $1.05 to $0.75?

• A)Alex
• B)Barb
• C)Carlos
• D)Alex and Barb experience the same gain in consumer surplus, and Carlos's gain is zero.

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Definitions:

Discretionary Income

The money that remains after paying for taxes and necessities.

Disposable Income

The money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation.

Market Segmentation

The strategy of dividing a broad target market into subsets of consumers with common needs or characteristics, targeting each with a specific marketing mix.

Organizational Markets

Markets consisting of companies, governments, and institutions that purchase goods and services for operations, production, or resale purposes.