Asked by Samantha Beveridge on Jul 03, 2024
Verified
Refer to Figure 11.1.1 above. To capture the consumer surplus along the B range, the firm would ideally charge:
A) a higher price to consumers willing to pay more and a lower price to those willing to pay less.
B) the same higher price to all consumers.
C) a higher price to consumers willing to pay less and a lower price to those willing to pay more.
D) a range of random prices along the demand curve.
Consumer Surplus
Consumer surplus is the difference between the highest price a consumer is willing to pay for a good or service and the actual price they pay.
Capture
The act of gaining control or possession of something, often referring to market share or resources.
Demand Curve
A graphical representation of the relationship between the price of a good and the quantity demanded by consumers at those prices.
- Acknowledge the ways in which enterprises can secure consumer surplus through the application of pricing strategies.
- Evaluate the role of elasticity of demand in the pricing decisions of firms.
Verified Answer
Learning Objectives
- Acknowledge the ways in which enterprises can secure consumer surplus through the application of pricing strategies.
- Evaluate the role of elasticity of demand in the pricing decisions of firms.
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