Multiple Choice
Which of the following is NOT a factor that affects the consumer surplus and willingness to pay for a company's action cameras?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
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In microeconomics, the percentage of total market sales accruing to one specific firm is called the:
A
consumer surplus
B
producer surplus
C
willingness to pay
D
market share
Verified step by step guidance1
Understand the definition of each term provided in the options to distinguish which one relates to the percentage of total market sales for a firm.
Consumer surplus refers to the difference between what consumers are willing to pay for a good and what they actually pay, so it does not measure a firm's sales share.
Producer surplus is the difference between the amount a producer receives from selling a good and the minimum amount they are willing to accept, which also does not represent a firm's market sales percentage.
Willingness to pay is the maximum amount a consumer is ready to pay for a good or service, unrelated to the firm's share of total market sales.
Market share is defined as the percentage of total market sales that a specific firm captures, making it the correct term for the problem's description.
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