Consumer surplus is important to firms because:
A) it represents value consumers receive that they do not pay for.
B) market prices must incorporate consumer surplus.
C) they must pay taxes based on the level of consumer surplus.
D) if firms can capture it, they can increase their profitability.
E) a and d

Question

Quizplus · Accepted Answer

Consumer surplus represents value that consumers receive but do not pay for. If firms can capture this surplus through pricing strategies or other means, they can increase their profitability. Therefore, consumer surplus is important to firms because it can directly impact their bottom line.

Consumer Surplus Is Important to Firms Because