Asked by
Mayeng Pedrera
on Oct 26, 2024
Verified
Consumer surplus for an individual buyer is equal to the:
A) consumer's willingness to pay for the good minus the marginal cost of producing the good.
B) price of the good minus the marginal cost of producing the good.
C) consumer's willingness to pay for the good minus the price paid for the good.
D) marginal cost of the good minus the consumer's willingness to pay for the good.
Consumer Surplus
The discrepancy between what consumers are prepared and capable of paying for a product or service compared to what they end up spending.
Willingness to Pay
The maximum amount a buyer is prepared to spend on a good or service, reflecting the value they derive from it.
- Comprehend the principle of consumer surplus and the method of its computation.
- Comprehend the connection between consumer's readiness to purchase, the prevailing market price, and the surplus value to the consumer.
Verified Answer
SV
Learning Objectives
- Comprehend the principle of consumer surplus and the method of its computation.
- Comprehend the connection between consumer's readiness to purchase, the prevailing market price, and the surplus value to the consumer.