Question

When policymakers are considering a particular action, they can use consumer surplus as a(n) A. objective measure of the benefits to buyers as determined by policymakers. B. measure of the benefits to buyers as the buyers perceive them. C. potentially flawed measure of the benefits to buyers if the buyers are not rational. D. Both b) and c) are correct.

Answer 1

Answer:

D. Both b) and c) are correct.

Explanation:

Consumer surplus is the difference between the total profit we get from service and its market price. This means that the first unit to acquire we value it highly but as we acquire additional units our valuation falls. However, the price we pay for any unit is always the same.

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