When Consumers Would Have Been Willing to Pay Higher Prices

question 170

Multiple Choice

When consumers would have been willing to pay higher prices at various quantities consumed than the market clearing price, the differences are called

• A) consumer surplus.
• B) scarcity.
• C) opportunity cost.
• D) producer surplus.

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Definitions:

Marginal Physical Product

The additional output that can be produced by adding one more unit of a specific input, holding all other inputs constant.

MRP

Marginal Revenue Product; the additional revenue generated from employing one more unit of input or labor.

Derived Demand

Demand for resources derived from demand for the final product.

Final Demand

The demand for finished products by consumers, businesses, and the government, without any further processing or transformation.