All consumers in the market enjoy a consumer surplus.
Answer the following statement true (T) or false (F)
False
Consumers who are willing to pay the equilibrium price or more enjoy a consumer surplus. Buyers who are willing to pay less than the equilibrium price do not enjoy a consumer surplus.
You might also like to view...
Refer to the scenario above. What is the optimal strategy of each bidder?
A) Each bidder should bid up to his/her maximum willingness to pay for the necklace. B) Each bidder should bid above his/her maximum willingness to pay for the necklace. C) Each bidder should bid up to 9/10 of his/her valuation of the necklace. D) Each bidder should bid up to 4/5 of his/her valuation of the necklace.
The total value of the goods and services produced over a period of time represents an economy’s
a. planned savings. b. total income. c. total wealth. d. capital.
Increasing wage rates will result in more hours worked.
A. True B. False C. Uncertain
"The operator of the tunnel that links Britain and France, Eurotunnel, said that commercial and tourist traffic using its car and coach shuttle service had fallen sharply in 2004, leading to a drop in operating revenues of 4%. Eurotunnel's chief executive, Jean-Louis Raymond, blamed cut-throat competition from budget airlines." (news story, January 2005)
a. If Mr. Raymond is correct, are the services of airlines and Eurotunnel substitutes or complements? b. Use demand and supply analysis to explain how lower airfares between Paris and London impact the market for the shuttle services of Eurotunnel.