As a Result of Consumer Surplus,a Firm Typically Charges Less

question 84

Multiple Choice

As a result of consumer surplus,a firm typically charges less 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

---

Definitions:

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (output).

Opportunity Cost

The detriment of neglecting the next optimal alternative during the process of making a decision.

Opportunity Cost

The benefit that is missed or given up when choosing one alternative over another.

Hour

A unit of time equal to 60 minutes.