Which of the Following Best Explains the Source of Consumer

question 3

Multiple Choice

Which of the following best explains the source of consumer surplus for a good?

• A) Many consumers would be willing to pay more than the market price for the good.
• B) Many consumers pay prices that are greater than the equilibrium price of the good.
• C) Many consumers think the market price of the good is greater than its cost.
• D) Many consumers think the price elasticity of demand for the good is unit elastic.

---

Definitions:

Annuity Payment

An annuity payment is a periodic payment received from an annuity contract, typically used as an income stream during retirement.

Annuity Contract

A financial product sold by insurance companies that provides regular payments to the holder for a fixed period or for life in exchange for an initial payment.

Expected Return

The anticipated amount of profit or loss an investment is likely to generate over a specific period.

AGI

Adjusted Gross Income (AGI) is an individual's total gross income minus specific deductions. It is an important figure for calculating taxable income on the federal income tax return.