Two Economists from Northwestern University Estimated the Benefit Households Received

question 91

Multiple Choice

Two economists from Northwestern University estimated the benefit households received from subscribing to broadband Internet service.The economists found that

• A)the consumer surplus from dial-up Internet service exceeded the consumer surplus from broadband Internet service.
• B)the average consumer of broadband Internet service received a marginal benefit equal to $36.
• C)most consumers of broadband Internet service were not willing to pay more than $36 per month.
• D)one month's benefit to consumers who subscribe to broadband Internet service is about $890 million.

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Definitions:

Stockout Risks

The potential for inventory shortages that can result in lost sales, customer dissatisfaction, and negative impacts on a business's reputation and income.

EOQ

Economic Order Quantity, a formula used in inventory management to determine the optimal order size that minimizes total inventory costs.

Safety Stock

Additional inventory kept in reserve to protect against stockouts due to variability in demand or supply.

Reorder Point

The inventory level at which a new order should be placed to replenish stock before it runs out.