After trying on a dress, a consumer assesses it to be worth a maximum of $100 and is willing to pay that amount for the dress. However, the dress was priced at $80. What is the amount, $100, referred to as?
A) the producer surplus
B) the firm's cost (C) in manufacturing the dress
C) the consumer surplus
D) the value (V) the consumer attaches to the dress

Question

Quizplus · Accepted Answer

The amount, $100, is referred to as the value (V) the consumer attaches to the dress. Value denotes the dollar amount (V) a consumer would attach to a good or service. Value captures a consumer's willingness to pay and is determined by the perceived benefits a good or service provides to the buyer.

After Trying on a Dress, a Consumer Assesses It to Be