The Difference Between the Price Consumers Are Willing to Pay

question 13

Multiple Choice

The difference between the price consumers are willing to pay and the actual price they do pay is referred to as:

• A)consumer surplus.
• B)producer surplus.
• C)Positive cash flows.
• D)Cash outflows.

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Definitions:

Cash Paid

The total amount of money disbursed by a company in transactions, such as paying bills, salaries, or purchasing goods.

Interest

The charge for borrowing money, typically expressed as a percentage of the amount borrowed, paid by the borrower to the lender.

Cash Flow Ratio

A financial metric that compares a company's operating cash flow to its current liabilities, indicating its ability to pay off its obligations with the cash it generates.

Operating Activities

Activities directly related to the business's primary operations, including cash flows from sales, expenses, and cost of goods sold.