Define “consumer surplus.”
Please provide the best answer for the statement.
Consumer surplus is the benefit surplus received by a consumer or consumers through market transactions. A consumer surplus arises because all consumers pay the equilibrium price even though some consumers would be willing to pay more. Consumer surplus is measured as the difference between the maximum price a consumer is (or consumers are) willing to pay minus the actual price.
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Define savings rate. If the aggregate savings in an economy is $10,000 and the aggregate income in the economy is $70,000, what is the savings rate in the economy?
What will be an ideal response?
A requirement of perfect competition is that
i. many firms sell an identical product to many buyers. ii. there are no restrictions on entry into (or exit from) the market, and established firms have no advantage over new firms. iii. sellers and buyers are well informed about prices. A) i only B) i and ii C) iii only D) i and iii E) i, ii, and iii