Question

In a market, consumers get extra benefits called _____, while businesses receive extra benefits known as _____. consumer surplus; producer surplus producer surplus; consumer surplus demand; supply opportunity cost; marginal cost

Answer 1

Answer:

The answer is A.

Explanation:

Consumer surplus is the difference between the amount that consumers actually pay for a good or service and the price that they are willing to pay before. For example, Mr A. is willing to pay $50 for cloth and through his bargaining power he eventually paid $45 for the cloth. The consumer surplus is $5($50 - $45). It is beneficial to consumers.

Producer surplus is the difference between how much a producer is willing to accept for given quantity of a good and how much they actually receceived. It is beneficial to producers when the actual amount received is higher than the amount that was willing.