At the Current Price of a Good,Al's Consumer Surplus Equals

question 33

Multiple Choice

At the current price of a good,Al's consumer surplus equals 8,and Ben's consumer surplus equals 15.By using two-part pricing,a monopolist could increase his profit by

• A) 8.
• B) 16.
• C) 15.
• D) 30.

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Definitions:

Contribution Margin Ratio

A measurement that shows the percentage of sales revenue that exceeds variable costs, indicating how much contributes to fixed costs and profits.

Fixed Costs

Regular costs that do not vary with the scale of production or sales activities, encompassing rent, salary disbursements, and insurance contributions.

Target Net Income

The desired profit that a company aims to achieve within a specific period, often used in budgeting and planning.

Required Sales

Required sales represent the amount of sales needed to achieve a particular financial target, such as breaking even or reaching a desired profit level.