Multiple Choice
In microeconomics, what term describes the maximum amount you are willing to spend for an item?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In the context of consumer surplus and willingness to pay, target lists provided by a firm help salespersons identify which of the following?
A
Suppliers who offer the lowest production costs
B
Government agencies that regulate prices
C
Competitors with similar products
D
Customers who are willing to pay more than the market price
Verified step by step guidance1
Understand the concept of consumer surplus: it is the difference between what a consumer is willing to pay for a good or service and the actual market price they pay.
Recognize that a firm's target list is used by salespersons to identify potential customers who have a higher willingness to pay than the current market price.
Note that suppliers with the lowest production costs, government agencies, and competitors are not directly related to the concept of consumer surplus or willingness to pay in this context.
Conclude that the target list helps salespersons focus on customers who can generate consumer surplus by paying more than the market price, thus increasing the firm's revenue.
Summarize that the correct identification from the target list is 'Customers who are willing to pay more than the market price.'
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