Asked by Arauna Anwar on Jul 14, 2024
Verified
The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as:
A) market surplus.
B) market shortage.
C) consumer surplus.
D) producer surplus.
Consumer Surplus
See Buyer Surplus.
Maximum Price
The highest price that can be charged for a good or service, often set by regulatory authorities to protect consumers.
- Acquire knowledge of the market surplus construct, involving surpluses experienced by consumers and producers.
Verified Answer
NG
Nanci GonsalesJul 17, 2024
Final Answer :
C
Explanation :
Consumer surplus is the difference between the maximum price a customer is willing to pay for a product and the actual price they pay. It represents the benefit or surplus that the consumer receives from a transaction. Market surplus refers to the total benefit or surplus received in the market as a whole, while producer surplus is the difference between the price a producer receives and the minimum price they would be willing to accept for a product. Market shortage refers to a situation where demand exceeds supply.
Learning Objectives
- Acquire knowledge of the market surplus construct, involving surpluses experienced by consumers and producers.