Consumer surplus exists when A) consumers value the good more highly than what they must pay to buy it. B) it costs less to produce goods than buyers must pay for them. C) the marginal benefit of the good is always equal to or less than the price of the good. D) the price of the good is greater than the marginal cost of producing a unit of the good.

Consumer surplus exists when A) consumers value the good more highly than what they must pay to buy it. B) it costs less to produce goods than buyers must pay for them. C) the marginal benefit of the good is always equal to or less than the price of the good. D) the price of the good is greater than the marginal cost of producing a unit of the good.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

What is the consumer surplus in the market equilibrium? Again, the equations are: Qs = 3P-90 Qd = 400 - 5P
V surplus is the difference between the highest price a consumer is willing to and the price the consumer actually pays. This component of economic surplus is illustrated in the diagram to the right by area Do Quantity (per time period)
Suppose good X is initially at equilibrium with price p1 and quantity q1. Now imagine the following events took place: price of good Y (which is a complement) goes up by 20%, government introduces a tax of 5%, future price of good X is 10% higher (affecting demand only), and cost of producing X has fallen 10%. USING ONE SINGLE DIAGRAM, analyze how this chain of events will affect the equilibrium price and quantity.
Which of the following would lead to the creation of some consumer surplus? Sam refuses to pay $10 for a haircut because it is only worth $8 to him. Fred buys a car for $4000, the maximum amount that he is willing to pay. Danette pays $30 a month for phone service, but it is worth $70 a month to her. When Florence purchases a candy bar for 50 cents, she uses a $20 bill to pay for it.
A surplus (excess) condition will cause the supplier / producer to increase the price to get more profit so that the price returns to the equilibrium point.True or false?
The demand schedule for the lobster market is linear. The equilibrium quantity of lobster is 7,363 and the equilibrium price of lobster is $11. the quantity demanded of lobster is 9,139 when the price drops to $5. What is the value of consumers surplus in the lobster market? Enter your answer using 2 decimal places. Round up if the third decimal place is 5 or higher. Do not enter "$" as part of your answer. Omit the units.
When a market is in equilibrium and there is no outside intervention to change the equilibrium price: a- inefficiency is maximized. b- no mutually beneficial trades are missed. c- some mutually beneficial trades may be missed. d- total surplus is minimized.
Consumer surplus is a measure of the difference between: a) The price which a consumer has to pay and the cost of producing the good (in a diagram, the area between the market price, and the supply curve). b) The consumer’s willingness to pay, and the cost of production (the area between the demand curve and the supply curve). c) The value which a consumer places on a unit of the good, and the market price (the area between the demand curve and the market price line). d) The marginal revenue from sales and the marginal cost of sales (the area between the marginal revenue and the marginal cost curves).
if the price fall from p0 to p1, the change in consumer surplus is equal to what area?
A consumer is willing to pay $4 for a bag of pretzels, but the price is $1. The consumer surplus in this case is
The highest price that buyers are willing and able to pay for a given quantity of a good is the: a) shortage price b) surplus price c) determinant price d) demand price e) supply price
You’d be willing to pay $200 for a daylong admission ticket to a theme park. The cost of the ticket is $120. Your consumer surplus is: