Asked by Anika Singh on Jul 23, 2024
Verified
The difference between the maximum price a consumer is willing to pay for a product and the actual price the consumer pays is
A) allocative efficiency.
B) productive efficiency.
C) the consumer surplus.
D) the producer surplus.
Consumer Surplus
The gap in the total amount consumers are ready and capable of investing in a service or good and the actual outlay they make.
Maximum Price
A price ceiling set by a governing body, above which a particular good or service cannot be sold to prevent prices from becoming prohibitively high.
Actual Price
The price at which a good or service is sold in the market, as opposed to its listed or theoretical price.
- Relate economic concepts like consumer surplus, producer surplus, and deadweight loss to market equilibrium.
Verified Answer
KK
Krispy KareemJul 27, 2024
Final Answer :
C
Explanation :
The consumer surplus is the difference between the maximum price a consumer is willing to pay for a product and the actual price the consumer pays. This represents the additional benefit or value the consumer receives from purchasing the product at a lower price than they were willing to pay.
Learning Objectives
- Relate economic concepts like consumer surplus, producer surplus, and deadweight loss to market equilibrium.