In Problem 1, Sir Plus Has a Demand Function for Mead

question 3

Multiple Choice

In Problem 1, Sir Plus has a demand function for mead that is given by the equation D(p) = 100 - p. If the price of mead is $85, how much is Sir Plus's net consumer's surplus?

• A) 15
• B) 225
• C) 56.25
• D) 112.50
• E) 7,650

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Definitions:

Sales Discounts

Refers to reductions from the listed price of goods or services, offered by sellers to buyers, typically as an incentive or reward.

Accounts Payable

Amounts a company owes to creditors for goods or services bought on credit.

General Journal

A primary accounting record used to keep track of all financial transactions, listed in chronological order.

Overcharge Creditor

The act of charging a creditor more than the agreed amount or more than the fair price for goods or services.