When Creating a Demand Curve for a Good Where One

question 38

Multiple Choice

When creating a demand curve for a good where one group gets the good for free and another group must pay the market price you must

• A)add the quantity demanded for each group at each price.
• B)add the price paid at each quantity.
• C)take an average of the quantity demanded at each price.
• D)add the amount that the first group wants (when it is available to them free)to the quantity demanded by the second group at each price.

---

Definitions:

Variable Costs

Expenses which are dependent on the volume of activity within a business.

Profit-Volume Chart

A graphical representation that shows the relationship between a company's profits and its volume of sales, illustrating the break-even point and profit levels at different sales volumes.

Cost-Volume-Profit Chart

A chart that graphically shows sales, costs, and the related profit or loss for various levels of units sold. Also called a break-even chart.

Sales Mix

The combination of different products or services that a company sells, impacting its overall profitability.