If a Consumer Places a Value of $15 on a Particular

question 34

Multiple Choice

If a consumer places a value of $15 on a particular good and if the price of the good is $17,then the

• A)consumer has consumer surplus of $2 if he or she buys the good.
• B)consumer does not purchase the good.
• C)market is not a competitive market.
• D)price of the good will fall due to market forces.

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Definitions:

Variable Costs

Costs that change in direct proportion to the level of production or sales amount.

Allocated General Overhead

The portion of indirect costs assigned to a specific department, project, or production process.

Segment Margin

The amount of profit or loss generated by a particular segment of a business, after accounting for the direct costs and overheads attributable to that segment.

Avoidable Cost

Expenses that can be eliminated if a particular decision or action is not pursued.