The Height of the Demand Curve for a Product Indicates

question 296

Multiple Choice

The height of the demand curve for a product indicates the

• A) minimum price consumers are willing to pay for an additional unit of it.
• B) minimum quantity consumers are willing to purchase at the current price.
• C) maximum price consumers are willing to pay for an additional unit of it.
• D) minimum price required to induce suppliers to produce an additional unit of it.

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Definitions:

Consumer Surplus

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

Policy Price

The price set by government policy, often used in the context of agricultural products or utilities.

Government Policy

A plan of action or a set of decisions made by a government to guide public actions in a specific field or achieve certain goals.

Price Range

The spread between the highest and lowest selling price of a good or service in a particular market over a given period.