The attractiveness of a product relative to its cost is known as:

• A. consumer surplus
• B. marginal cost
• C. producer surplus
• D. price elasticity

Answer: (A)

Verified step by step guidance

1. Understand the concept being asked: The problem is about identifying the term that describes the attractiveness of a product relative to its cost.
2. Recall the definitions of the options: Consumer surplus is the difference between what consumers are willing to pay and what they actually pay; marginal cost is the cost of producing one additional unit; producer surplus is the difference between what producers receive and their minimum acceptable price; price elasticity measures responsiveness of quantity demanded to price changes.
3. Analyze which definition fits the idea of attractiveness relative to cost: The term should capture the benefit or value consumers perceive compared to the price they pay.
4. Recognize that consumer surplus directly measures the net benefit or attractiveness to consumers, as it reflects how much more value they get beyond the cost paid.
5. Conclude that the correct term describing the attractiveness of a product relative to its cost is consumer surplus.