Asked by Michaela Sharp on Jul 20, 2024
Verified
Suppose you buy an iPod for $100. If your consumer surplus is $30, your willingness to pay is $70.
Consumer Surplus
The variance between what consumers are prepared to pay for a product or service and the actual amount they end up paying.
Willingness To Pay
This is the maximum amount a consumer is prepared to spend on a good or service, reflecting the value the consumer places on it.
- Absorb the concepts surrounding willingness to pay, real payment, and the evaluation of surplus value.
Verified Answer
JB
Jean Bajohn LouisJul 24, 2024
Final Answer :
False
Explanation :
Your willingness to pay is $130, as consumer surplus is the difference between what you are willing to pay and what you actually pay.
Learning Objectives
- Absorb the concepts surrounding willingness to pay, real payment, and the evaluation of surplus value.