Multiple Choice
Generally, less money is spent on advertising in B2B markets than in B2C markets because:
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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
The market value of an item is:
A
the total consumer surplus generated by the item
B
the difference between willingness to pay and the actual price paid
C
the maximum amount a consumer is willing to pay for the item
D
the price at which the item is bought and sold in the market
Verified step by step guidance1
Understand the concept of market value: It refers to the price at which an item is bought and sold in the market, reflecting the equilibrium between supply and demand.
Recognize that consumer surplus is the difference between what consumers are willing to pay and what they actually pay, not the market value itself.
Recall that willingness to pay is the maximum amount a consumer is ready to pay for an item, which may be higher than the market price.
Note that the market value is distinct from consumer surplus and willingness to pay; it is the actual transaction price determined by market forces.
Therefore, the market value of an item is best defined as the price at which the item is bought and sold in the market.
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