Suppose That a Customer's Willingness-To-Pay for a Product Is $79

question 105

Multiple Choice

Suppose that a customer's willingness-to-pay for a product is $79, and the seller's willingness-to-sell is $64. If the negotiated price is $65

• A) consumer surplus is negative.
• B) consumer surplus is greater than producer surplus.
• C) producer surplus is negative.
• D) producer surplus is greater than consumer surplus.

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Definitions:

Total Costs

The sum of all costs incurred by a business in the production of goods or services, including both fixed and variable costs.

Total Revenues

The total amount of money generated by a firm or entity from its business activities, before any expenses are subtracted.

Average Total Cost

The total cost of production divided by the quantity of output produced; it includes both fixed and variable costs.

Long-Run Equilibrium

Long-run equilibrium occurs when an economy's resources are fully employed and the output and input markets are in balance, with no external forces causing disruption.