The difference between what consumers have to pay for a particular and what they are willing to pay is known as ?
Correct answer: A. consumer surplus
- A. consumer surplus
- B. producer surplus
- C. deadweight costs
- D. deadweight surplus
Explanation
Consumer surplus is the gap between a buyer’s willingness to pay and the price actually paid. Producer surplus instead measures the gap between the selling price and the producer’s minimum acceptable price.
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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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