Table 7-10 The Only Four Consumers in a Market Have the Following

question 541

Multiple Choice

Table 7-10
The only four consumers in a market have the following willingness to pay for a good:
Buyer Willingness to Pay

-Refer to Table 7-10. If the market price for the good is $20, who will purchase the good?

• A) Danita only
• B) Carolyn and Danita only
• C) Ashleigh, Barb, and Carolyn only
• D) All four buyers would purchase the good.

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Definitions:

Fixed Costs

Costs that do not change with the level of output or sales in the short term.

EPS

Earnings Per Share, a measure of a company's profitability, calculated as net income divided by the number of outstanding shares.

DFL

Degree of Financial Leverage, a ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating income due to changes in its capital structure.

EBIT

Earnings Before Interest and Taxes, a financial measure that calculates a company's profitability based on its operations without the effects of interest and taxes.