ECONOMICS
CONSUMERS
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The average willingness to pay of the buyer’s of the product
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The seller’s profit
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The seller’s producer surplus
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The seller’s cost of production
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Detailed explanation-1: -A seller would be willing to sell a product ONLY IF the price received is less than the cost of production. Total surplus in a market equals Consumer surplus + Producer surplus.
Detailed explanation-2: -Willingness to sell is the minimum amount that a seller will sell a good for. It measures the cost to the seller of producing the good or service.
Detailed explanation-3: -Willingness to sell is the opportunity cost of producing that unit of output, since sellers would not sell that unit below the cost of producing it, but would sell if the price was greater than the cost of producing it. Willingness to sell is exactly the seller’s “cost” in our experiment.
Detailed explanation-4: -A producer surplus is when someone sells something for more money than they were willing to sell it for. One real-world example of a surplus is cars in the United States. The U.S. is known for its automotive industry and produces a vast number of vehicles, automotive parts, and accessories each year.