Aggregate surplus: a)equals consumers' total willingness to pay for a good less firms' total avoidable cost...

Aggregate surplus:

a)equals consumers' total willingness to pay for a good less firms' total avoidable cost of production.

b)equals consumers' total willingness to pay for a good plus firms' total avoidable cost of production.

c)captures the total benefit created by the production and consumption of the good.

d)captures the total cost created by the production and consumption of the good.

Solutions

Expert Solution

Option

a)equals consumers' total willingness to pay for a good less firms' total avoidable cost of production.

An aggregate surplus is the total net surplus created by the consumption and production of a good in a market.

The costs are deducted to find the net benefit to the society from the trade.

Rahul Sunny answered 2 years ago

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