Table 7-5 For Each of Three Potential Buyers of Oranges,the Table Displays

question 14

Multiple Choice

Table 7-5
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 7-5.Which of the following statements is correct?

• A) Neither Barb's consumer surplus nor Carlos's consumer surplus can exceed Alex's consumer surplus,for any price of an orange.
• B) All three individuals will buy at least one orange only if the price of an orange is less than $0.25.
• C) If the price of an orange is $0.60,total consumer surplus is $4.90.
• D) All of the above are correct.

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Definitions:

Binding Contract

An agreement between two or more parties that is enforceable by law, where all parties have agreed to the terms through offer and acceptance.

Contractual Capacity

The legal ability of a person to enter into a binding contract.

Form a Contract

The process of creating a legally binding agreement between two or more parties.

Consideration

The benefit which is bargained for between the parties and is the essential reason for a party entering into a contract.