Suppose There Are Three Consumers in the Market for Chocolate

question 102

Multiple Choice

Suppose there are three consumers in the market for chocolate bars: Don, John, and Ron.At a price of $2 per bar, the quantities demanded by each are 3, 2, and 1, respectively.At a price of $1.50 per bar, the quantities demanded by each are 4, 5, and 3, respectively.Which of the following reflects what will happen in this market?  

• A) The market demand curve for chocolate bars will NOT obey the law of demand. 
• B) The price decrease will cause the quantity demanded in this market to increase by 6. 
• C) The price decrease will cause John's demand curve to shift the most. 
• D) The price decrease will cause the quantity demanded to decrease by 6.

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing, excluding direct labor and direct materials costs.

Factory Overhead Costs

Indirect manufacturing expenses that are not directly tied to the production of goods, such as utilities, maintenance, and managerial salaries.

Direct Labor Hours

Direct Labor Hours are the total time workers who are directly involved in the manufacturing process spend on producing goods.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor costs.