Questions: Refer to the accompanying figure. At a price of 2, the total expenditure on lattes each hour equals Select one: a. 40. b. 80. c. 30. d. 60.

Transcript text: Refer to the accompanying figure. At a price of $\$ 2$, the total expenditure on lattes each hour equals Select one: a. $\$ 40$. b. $\$ 80$. c. $\$ 30$. d. $\$ 60$.

Solution

Solution Steps

Step 1: Identify the price and quantity

The problem states that the price of a latte is $2. We need to find the quantity of lattes demanded at this price from the graph.

Step 2: Locate the quantity on the graph

From the graph, at a price of $2, the quantity demanded is 50 lattes per hour.

Step 3: Calculate the total expenditure

Total expenditure is calculated by multiplying the price per latte by the quantity demanded. \[ \text{Total Expenditure} = \text{Price} \times \text{Quantity} \] \[ \text{Total Expenditure} = 2 \times 50 = 100 \]