Suppose That Irina Is Prepared to Pay a Maximum of $2.40

question 3

Multiple Choice

Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
-Refer to the above information to answer this question.If the price of cranberry juice is 80 cents a glass,how much consumer surplus will she receive as a result of her purchases?

• A)0.
• B)$0.80.
• C)$13.60.
• D)$14.40.
• E)Cannot be determined.

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Definitions:

Benchmark

A standard or point of reference against which the performance of securities, investments, or funds can be measured.

FASB

The Financial Accounting Standards Board, an independent organization responsible for establishing accounting and financial reporting standards for companies and non-profit organizations in the United States.

Aspirational Firm

A concept in business and finance referring to a company that sets ambitious goals and seeks to innovate and grow rapidly.

LIFO

Last In, First Out, an accounting method used to value inventory that assumes the most recently produced items are the first to be sold.