Consumer Surplus Exists When a

question 252

Multiple Choice

Consumer surplus exists when a

• A) person buys something with a marginal benefit less than what they paid.
• B) person buys something with a marginal benefit exactly what they paid.
• C) person buys something with a marginal benefit more than what they paid.
• D) producer sells something for more than it is worth.
• E) person buys something with a marginal cost less than what they paid.

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Definitions:

Variable Costs

Expenses that vary directly with the level of production or output.

Long-Run Average Total Cost

The average cost per unit of output where all inputs are considered variable, calculated over a period where firms can adjust all factors of production.

Short-Run Marginal Cost

The cost incurred by producing one additional unit of a product or service in the short run, where some factors are fixed.

Government Regulations

Laws and rules established by governmental agencies to control or modify economic behavior, protect consumers, or preserve natural resources.