Table 93 Julie Plans to Start a Pet-Sitting Service

question 31

Multiple Choice

Table 9.3 Julie plans to start a pet-sitting service.She surveyed her neighbourhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 9.3 above shows a portion of her survey results.
-Refer to Table 9.3.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges each customer according to his or her willingness to pay instead of a uniform price of $7.Which of the following statements is true?

• A)Julie is worse off because the demand for her services is reduced.
• B)Julie has converted the consumer surplus (from a uniform price)into economic profit.
• C)Julie's customers are better off because their consumer surplus has increased.
• D)Julie's has converted the producer surplus (from a uniform price)into consumer surplus.

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Definitions:

Tires

Rubber-covered, air-inflated components of a vehicle that provide a flexible cushion between the vehicle and the road, enhancing traction and absorbing shock.

Average Tariff

The average rate of duty or tax levied on imported goods.

Imports

Goods or services bought from foreign countries for domestic consumption or use.

Free Trade

International trade left to its natural course without tariffs, quotas, or other restrictions.