Multiple Choice
Which of the following is an example of a final good or service?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
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Which segment of the market do Black Friday and Cyber Monday sales primarily target?
A
Government agencies regulating prices
B
Consumers with a low willingness to pay
C
Consumers with a high willingness to pay
D
Producers seeking to maximize profit
Verified step by step guidance1
Understand the concept of willingness to pay, which refers to the maximum price a consumer is willing to pay for a good or service.
Recognize that Black Friday and Cyber Monday sales are promotional events designed to offer significant discounts on products.
Analyze the purpose of these sales: they aim to attract consumers who are sensitive to price and may not purchase at regular prices.
Identify that consumers with a low willingness to pay are more likely to be influenced by these discounts and thus are the primary target of such sales.
Conclude that these sales are less focused on consumers with a high willingness to pay or government agencies, and more on increasing sales volume by appealing to price-sensitive consumers.
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