By selling a laptop at $1,000 for which consumers are willing to pay up to $1,200, a consumer electronics firm makes a profit of $400 per unit. In this scenario, the amount $600, that is ($1200 - $1000) + $400, is the
A) opportunity cost.
B) economic value created.
C) reservation price.
D) consumer surplus.

Question

Quizplus · Accepted Answer

Economic value creation equals consumer surplus plus firm profit, or the sum of consumer and producer surplus.

By Selling a Laptop at $1,000 for Which Consumers Are