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

question 35

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.If the market price of an orange increases from $0.60 to $1.05,then consumer surplus

• A) increases by $2.90.
• B) decreases by $2.25.
• C) decreases by $2.70.
• D) decreases by $3.85.

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Definitions:

Cash Inflows

The money received by a business from its operational, investment, and financing activities.

Profitability Index

A financial measure that assesses an investment's attractiveness, determined by dividing the present value of future cash flows by the initial investment amount.

Initial Investment

The initial amount of money that is invested in a project or venture at the beginning.

Salvage Value

The predicted end-of-life value of an asset once its period of usability concludes.