Question

An online music store charges ?$1.10 per song. If you spent ?$220 on songs last month then your

A. quantity demanded was 1.10 dollars.
B. quantity demanded was 220 dollars.
C. quantity demanded was 200 songs.
D. marginal benefits must be less than ?$1.10 per song.

Answer 1

The correct answer to the question is C. quantity demanded was 200 songs, based on the total amount spent of $220 and a price of $1.10 per song.

Step-by-step explanation:

The question is related to the concept of consumer surplus and understanding the relationship between price, quantity demanded, and consumer utility in a market scenario. An online music store charges $1.10 per song. If $220 was spent on songs last month, the quantity demanded would be 200 songs, since the total amount spent divided by the price per song equals the number of songs purchased (i.e., $220 / $1.10 = 200). Therefore, the correct answer is C. quantity demanded was 200 songs. The concept of consumer surplus is critical here because it represents the benefit to consumers from paying a price that is lower than what they are willing to pay. In our example, if consumers are willing to pay more than $1.10 per song but only pay this market price, they receive a surplus.