Asked by Samantha Beveridge on Jul 03, 2024

verifed

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.
verifed

Verified Answer

ZK
Zybrea KnightJul 04, 2024
Final Answer :
A
Explanation :
To capture the consumer surplus along the B range, the firm should ideally charge a higher price to consumers willing to pay more and a lower price to those willing to pay less. This is because charging the same higher price to all consumers (option B) would result in some consumers being priced out of the market and those who are still willing to pay the higher price not receiving any consumer surplus. Charging a higher price to consumers willing to pay less and a lower price to those willing to pay more (option C) would result in the firm capturing less consumer surplus and potentially losing some customers who are unwilling to pay the higher price. Charging random prices along the demand curve (option D) is not a feasible option as it is not something that the firm can predict or control.