Consumer Surplus Is the ________

question 129

Multiple Choice

Consumer surplus is the ________.

• A) difference between the buyer's reservation value and the price he actually pays
• B) product of a buyer's reservation value and the price he actually pays
• C) sum of a buyer's reservation value and the price he actually pays
• D) ratio of a buyer's reservation value to the price he actually pays

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Definitions:

Decline

A decrease in quantity, quality, or strength over a period, often observed in economic indicators, stock prices, or physical capacities.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Payment Stream

Payment stream refers to a series of payments made over time, such as in an annuity, loan repayments, or any regular monetary transfers.