As a Result of Consumer Surplus, a Firm Typically Charges

question 52

Multiple Choice

As a result of consumer surplus, a firm typically charges a lower price for a good or service than the value placed on it by customers because:

• A)the value creation results in a corresponding reduction in costs of production.
• B)it is highly unlikely that the same good or service will be available to the customers from other firms.
• C)the firm is competing with other firms for the customer's business.
• D)the firm charges a price that reveals a consumer's assessment of the product's value.
• E)the firm creates value for the customer by producing a wide range of products.

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Definitions:

Emotional Response

The psychological and physiological reactions to stimuli that are perceived as emotionally relevant.

Cognitive Control

Using rational thinking to regulate one’s emotions and to control how one reacts to emotional feelings.

Frontal Lobes

The part of the brain involved in executive functions, such as decision making, problem solving, and controlling behavior.

Bodily Humor

A historical theory in medicine that believed human health and temperament depended on the balance of bodily fluids.