The difference between the price consumers are willing to pay and the actual price they do pay is referred to as:
A)consumer surplus.
B)producer surplus.
C)Positive cash flows.
D)Cash outflows.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay. It represents the value the consumer receives above and beyond what they actually pay. Producer surplus, on the other hand, is the difference between the actual price received by the producer and the minimum price they would have been willing to sell the product for. Positive cash flows and cash outflows are accounting terms related to a company's cash position, and are not applicable to this scenario.

The Difference Between the Price Consumers Are Willing to Pay