What Consumer Surplus Is Received by Someone Whose Willingness to Pay

question 110

Multiple Choice

What consumer surplus is received by someone whose willingness to pay is $35 below the market price of a good?

• A) $35
• B) $0
• C) ($35 x P*)
• D) None of these is correct.

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Definitions:

Shortage

The insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied; shortages occur when the price is below the equilibrium price.

Price Elasticity of Demand

The rate at which demand for a product responds to its price being altered.

Short Run

The period in economic theory during which at least one factor of production is considered fixed.

Long Run

A period in which all factors of production can be varied, and no inputs are fixed.