When a Product Is Defined as Homogeneous

question 46

Multiple Choice

When a product is defined as homogeneous,

• A) buyers prefer one seller's product to another's.
• B) buyers are indifferent as to which seller's product they buy.
• C) sellers are indifferent as to the quantity of the product they sell.
• D) sellers have an incentive to charge a price higher than the market price.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.

Alfred Marshall

A prominent British economist known for his significant contributions to microeconomics and for popularizing the use of supply and demand graphs.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.

Marginal Utility

The additional satisfaction or utility that a consumer derives from consuming one more unit of a good or service.