Table 93 Julie Plans to Start a Pet-Sitting Service

question 181

Multiple Choice

Table 9.3 Julie plans to start a pet-sitting service.She surveyed her neighbourhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 9.3 above shows a portion of her survey results.
-Refer to Table 9.3.Suppose Julie's marginal cost of providing this service is constant at $7 and she decides to charge each customer according to his or her willingness to pay.What is the value of consumer surplus by her customers?

• A)$39
• B)$28
• C)$11
• D)$0

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Definitions:

Units

A measurement of quantity for inventory, production, or financial calculation, indicating single items or entities.

Variable Cost

Expenditures that alter in correlation with production or service output levels.

Units

A measure of quantity, either as product units in the context of business or other defined measures.

Variable Cost

Costs that vary directly with the level of production output, such as raw materials and labor costs directly involved in production.