Consumers' Surplus Is the Difference Between the Price

question 67

Multiple Choice

Consumers' surplus is the difference between the price

• A) sellers receive for a good and the maximum price they would have paid for the good.
• B) sellers receive for a good and the minimum price for which they could have sold the good.
• C) buyers pay for a good and the maximum price they would have paid for the good.
• D) buyers pay for a good and the minimum price for which they would have sold the good.

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Definitions:

Marginal Revenue

The increase in revenue from the sale of one more unit of a product or service.

Natural Monopoly

A market situation where a single supplier can provide a good or service more efficiently than any potential competitor, often due to high initial setup costs.

Local Phone Company

A telecommunications company that provides phone services primarily within a local or regional area.

Making a Profit

The financial gain realized when the revenue gained from a business activity exceeds the costs, expenses, and taxes involved in sustaining the activity.