Examlex
Use the following information for following questions:
A group of 500 patients who suffer from skin cancer were asked to participate in a study to
determine the effectiveness of a new medication. The patients were randomly divided into two
groups, one that was given the actual medication, and one that received a placebo pill. A good
outcome was defined as the cancer being in remission after 6 months of treatment. The results of
the study are below.
-Was the new medication effective for cancer remission?
Demand Curve
A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase at various prices.
Willingness to Pay
The maximum amount a consumer is ready to spend on a good or service.
Consumer Surplus
The discrepancy between the amount consumers are prepared to pay for a product or service and the price they actually spend.
Consumer Surplus
Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.
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