Suppose you receive a consumer surplus of $50. The $50 represents __________ .
A. a monetary payment from the store
B. a monetary payment from the government
C. a reduction in the original price of the good
D. the fact that you paid $50 less than you were willing to pay for the good
An- C
No, not C.
Yes, d.
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To determine the answer, we need to understand what consumer surplus represents and how it is calculated.
Consumer surplus is a measure of the economic benefit that consumers receive from consuming a good or service. It is the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay.
To calculate consumer surplus, we can use the demand curve for the good, which represents the relationship between the price of the good and the quantity demanded. The area below the demand curve but above the price paid represents the consumer surplus.
In this case, you receive a consumer surplus of $50. This means that you paid $50 less than the maximum price you were willing to pay for the good. Therefore, the correct answer is D. the fact that you paid $50 less than you were willing to pay for the good.