Question
Consumer Surplus can be socially described as the gap between... the value added to a good/service and its quality. the value received from a good/service and its quality. the value received from a good/service and its market price. the value added to a good/service and its market price.
Ask by Cox Lynch. in the United States
Feb 24,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
Consumer Surplus is the difference between the value received from a good or service and its market price.
Solution
Consumer Surplus is defined as the difference between the total value that consumers place on a good or service and the total amount they actually pay for it. Therefore, the correct description is:
**the value received from a good/service and its market price.**
This means that consumer surplus represents the benefit or surplus that consumers receive when they pay a price lower than what they are willing to pay for a good or service.
Answered by UpStudy AI and reviewed by a Professional Tutor
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Simplify this solution The Deep Dive
Consumer Surplus can be socially described as the gap between the value received from a good/service and its market price. This concept highlights the benefits that consumers gain when they pay less than what they are willing to pay, effectively representing the economic welfare that consumers experience. In real-world scenarios, this concept helps businesses gauge how much consumers value their products. Companies that can identify high consumer surplus might consider adjusting prices or improving quality to enhance sales and customer satisfaction. It's a handy tool that can lead to better pricing strategies and help boost overall market efficiency!
