There Are Three Consumers in the Market for Playing Cards

question 57

Multiple Choice

There are three consumers in the market for playing cards: Don, John, and Ron.At a price of $2 per pack, the quantities demanded by each are 3, 2, and 1, respectively.At a price of $1.50 per pack, the quantities demanded by each are 4, 5, and 3, respectively.Which of the following is true?

• A)The market demand curve for playing cards does not obey the law of demand.
• B)The price decrease causes the quantity demanded in this market to increase by 6.
• C)The price decrease causes John's demand curve to shift the most.
• D)At a price of $1 per pack, the quantity demanded in this market must be 20.
• E)Don's behavior does not obey the law of demand.

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that represents the estimated portion of accounts receivable which may not be collected due to customer defaults.

Bad Debt Expense

The cost recognized by a company because of the expectation that certain accounts receivable will not be collected.

Cost of Sales

refers to the direct costs attributable to the production of the goods sold in a company.

Increase in Accounts Receivable

A situation where the amount owed by customers for goods or services increases during a specific period, often indicating sales growth, but also potentially impacting cash flow.