The Extent to Which a Firm Is Viewed by Consumers

question 166

Multiple Choice

The extent to which a firm is viewed by consumers as being a monopoly depends primarily on

• A)how the government defines a monopoly
• B)whether they believe there are close substitutes for the good it produces
• C)the level of profits earned by the firm
• D)the difference between price and marginal cost of the good it produces
• E)the size of the firm

---

Definitions:

Consumer's 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.

Earplugs

Small devices inserted into the ear canal to protect the ears from loud noises, water, or to block out sound for concentration or sleep.

Utility Function

Mathematical model that quantifies satisfaction levels consumers receive from consuming various quantities of goods and services, guiding choices under constraint.

Consumer's Surplus

The gap between what consumers are prepared and capable of spending for a product or service and the aggregate sum they end up paying.