Consumer surplus results when companies charge a lower price for products than the value placed on them by customers. This occurs because
A) the value creation results in a corresponding reduction in costs of production.
B) it is highly unlikely that the same good or service will be available to the customers from other firms.
C) the firm is competing with other firms for the customer's business.
D) the firm charges a price that reveals a consumer's assessment of the product's value.
E) the firm creates value for the customer by producing a wide range of products.

Question

Quizplus · Accepted Answer

Consumer surplus occurs when firms compete, leading to lower prices than the value customers place on the products, as firms aim to attract more customers.

Consumer Surplus Results When Companies Charge a Lower Price for Products