Which of the following is a common way magazines and newspapers generate revenue related to consumer surplus and willingness to pay?

• A. Providing all content for free without advertisements
• B. Only selling physical copies at a fixed price
• C. Charging different prices to different consumers based on their willingness to pay
• D. Relying solely on government subsidies

Answer: (C)

Verified step by step guidance

1. Understand the concept of consumer surplus, which is the difference between what consumers are willing to pay for a good or service and what they actually pay.
2. Recognize that businesses aim to capture some of this consumer surplus as revenue by pricing strategies that reflect consumers' willingness to pay.
3. Identify that charging different prices to different consumers based on their willingness to pay is known as price discrimination, a common method to increase revenue by reducing consumer surplus.
4. Note that providing all content for free or relying solely on government subsidies does not directly capture consumer surplus as revenue.
5. Understand that selling physical copies at a fixed price does not differentiate between consumers with different willingness to pay, thus not maximizing revenue from consumer surplus.