The High-Low Method Is Used to ________

question 21

Multiple Choice

The high-low method is used to ________.

• A) determine the highest price that can be charged for a product
• B) separate mixed costs into their variable and fixed components
• C) identify the relevant and irrelevant costs of a business
• D) determine the sales level at highest capacity

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Definitions:

Total Utility

In economics, the total satisfaction received from consuming a particular quantity of goods or services.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Marginal Utility

The increased happiness a buyer experiences by consuming an extra unit of a product or service.

Consumer Surplus

Consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay, measuring consumer satisfaction.