Which of the Following Statements Is TRUE

question 19

Multiple Choice

Which of the following statements is TRUE?

• A) Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and its market price.
• B) Bill is willing to pay $10 for a pound of clay. If he buys a pound of clay at a market price per pound of $5, his consumer surplus is $2.
• C) Total consumer surplus is represented graphically by the area beneath the demand curve.
• D) Total consumer surplus is represented graphically by the area above the demand curve.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, aging, or obsolescence.

EAC Method

Equivalent Annual Cost Method, a decision-making tool used for evaluating the cost-effectiveness of projects with differing lifespans.

Mutually Exclusive

Situations or decisions that cannot occur simultaneously; choosing one option means the others cannot be chosen.

Projects

Specific tasks or programs undertaken to achieve goals within a timeframe, often involving research or design efforts.