Multiple Choice
Consumers are diverse with distinct needs and wants, resulting in ________.
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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
A successful business strategy creates blank______ for both producers and consumers.
A
surplus
B
deadweight
C
equilibrium
D
losses
Verified step by step guidance1
Understand the concept of surplus in microeconomics: Surplus refers to the benefits that producers and consumers receive from engaging in market transactions beyond their costs or willingness to pay.
Recall that consumer surplus is the difference between what consumers are willing to pay for a good and what they actually pay, representing the benefit to consumers.
Recall that producer surplus is the difference between the price producers receive for a good and their minimum acceptable price (cost), representing the benefit to producers.
Recognize that a successful business strategy aims to increase both consumer surplus and producer surplus, thereby creating value for both parties.
Conclude that the term that best fits the blank is 'surplus' because it captures the net benefits to both producers and consumers.
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