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Consumer Surplus and Marginal Analysis
easy

What occurs when a consumer purchases a product for a price lower than what they are willing to pay, resulting in additional benefit?

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Learning Path
Learning Path

Question & Answer
1
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2
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3
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4
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Choose the Best Answer

A

Producer surplus

B

Consumer surplus

C

Marginal cost

D

Total revenue

Understanding the Answer

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Answer

When a consumer buys a product for less money than they were ready to spend, they experience something called consumer surplus. This surplus is the extra satisfaction or benefit they gain because they paid a lower price than expected. For example, if someone was willing to pay $50 for a pair of shoes but found them on sale for $30, they save $20 and feel even happier about their purchase. This extra happiness is the consumer surplus, and it shows how consumers benefit from good deals. Understanding consumer surplus helps businesses think about pricing and how to attract more buyers by offering value.

Detailed Explanation

Consumer surplus happens when you buy something for less than you would pay. Other options are incorrect because Producer surplus is about sellers, not buyers; Marginal cost is the cost of making one more item.

Key Concepts

marginal analysis
Topic

Consumer Surplus and Marginal Analysis

Difficulty

easy level question

Cognitive Level

understand

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