Table 7-5 For Each of Three Potential Buyers of Oranges, the Table

question 95

Multiple Choice

Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. If the market price of an orange is $0.40, then

• A)6 oranges are demanded per day, and consumer surplus amounts to $4.95.
• B)6 oranges are demanded per day, and consumer surplus amounts to $5.10.
• C)7 oranges are demanded per day, and consumer surplus amounts to $5.30.
• D)7 oranges are demanded per day, and consumer surplus amounts to $5.15.

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Definitions:

Factory Overhead

The total of all costs that are incurred to manufacture products, excluding the direct costs of labor and materials.

Sales Supplies Used

Pertains to the total cost of sales or promotional materials consumed or utilized during a particular period.

Selling and Administrative Expense

Selling and administrative expense includes costs related to the selling of products and the management of the business, excluding production costs.

Factory Overhead

Costs tied to manufacturing processes, excluding those for direct labor and materials.