Which of the Following Represents a Disadvantage of the Consignment

question 28

Multiple Choice

Which of the following represents a disadvantage of the consignment approach?

• A) Availability of different consignment stores and auctions
• B) Long amount of time before payouts
• C) Full-time sales with only a part-time involvement from the owner
• D) High setup costs

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Definitions:

Consumer Surplus

The discrepancy between the price consumers are ready to offer for a good or service and the price they end up paying.

Marginal Benefit

The enhanced enjoyment or utility gained from the consumption of one extra unit of a good or service.

Total Revenue

The collective revenue a business accumulates from sales of products or provision of services within a set period.

Allocative Efficiency

A state of the economy in which resources are allocated in a way that maximizes the overall benefit to society, where the marginal costs of production are equal to the marginal benefits for all goods and services.