_______ represents the difference between what consumer have to pay for a product and what they are willing and able to pay ?
Correct answer: D. consumer surplus
- A. producer surplus
- B. deadweight surplus
- C. government surplus
- D. consumer surplus
Explanation
Consumer surplus measures the benefit buyers receive when they pay less than the maximum amount they are willing and able to pay. Producer surplus concerns sellers, while government surplus concerns public revenue minus costs.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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