After Trying on a Dress, a Consumer Assesses It to Be

question 49

Multiple Choice

After trying on a dress, a consumer assesses it to be worth a maximum of $100 and is willing to pay that amount for the dress.However, the dress was priced at $80.What is the amount, $100, referred to as?

• A) The producer surplus
• B) The firm's cost (C) in manufacturing the dress
• C) The consumer surplus
• D) The value (V) the consumer attaches to the dress

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Definitions:

Simple Interest

Interest calculated only on the principal amount, or the initial amount of money borrowed or invested, not on the interest accumulated over time.

Basic Interest Rate

The fundamental rate charged on loans or earned on deposits, before any adjustments for additional factors or fees.

Discounted Value

The present value of a future amount of money or stream of cash flows after being discounted by a specific rate.

Present Value

The contemporary evaluation of a future financial sum or cash inflow patterns, using a defined rate of return.