Suppose Julia and Zach Are the Only Consumers of Milk

question 16

Multiple Choice

Suppose Julia and Zach are the only consumers of milk.Julia's demand for milk is defined as at prices below $4 and zero for prices above $4.Zach's demand for milk is defined as at prices below $5 and zero for prices above $5.

• A) The market demand curve is upward sloping
• B) The market demand curve is a downward sloping straight line
• C) The market demand curve is kinked at a quantity of 2 units
• D) The market demand curve is kinked at a quantity of 1 unit

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Definitions:

Mail Float

The time delay between when a check is written and mailed, and when the recipient actually receives and processes the payment.

Processing Float

The time difference between when a payment is made and the funds are actually available in the payee's account.

Credit Policy

Guidelines that govern a company's extension of credit to customers, determining who is eligible and on what terms.

Credit Sales

Sales made by a business on credit, allowing customers to pay at a later date.