Phil and Lasca Have Always Wanted to Take a Cruise

question 236

Multiple Choice

Phil and Lasca have always wanted to take a cruise.Although willing to pay $5,000 for a Caribbean cruise for two, they were able to purchase a cruise vacation for two for $3,500.Their total consumer surplus amounted to:

• A)$750.
• B)$5,000.
• C)$1,500.
• D)$3,500.
• E)$0.

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Definitions:

Unit Variable

A measurement that reflects how variable costs change per unit of production or activity level.

Unit Fixed

This specifies a cost or charge that remains constant per unit regardless of changes in the level of activity or volume of production.

Costs

Costs refer to the expenditures incurred by a business in the process of generating revenues.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit.