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.

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Definitions:

Fair Market Value

The price that property would sell for on the open market between a willing buyer and a willing seller.

Rental Payment

The amount paid periodically by a tenant to a landlord in exchange for the use of property or land.

Primarily Rental Property

Real estate that is predominantly used for rental to others, rather than as the owner's primary residence.

Schedule E

A form used by the IRS for taxpayers to report income and losses from rental property, royalties, partnerships, S corporations, estates, and trusts.