The value of a product to an average consumer is V, the average price

QUESTION

The value of a product to an average consumer is V, the average price that the firm can charge a consumer for that product is P, and the average unit cost of producing that product is C. For this scenario, which of the following is true?

A. The firm makes a profit so long as C is greater than P.

B. The higher C is relative to P, greater will be the profit.

C. The consumer surplus per unit is equal to V – P.

D. The higher the intensity of competitive pressure, the higher the price charged relative to V.

E. The lower the consumer surplus, the greater the value for the money the consumer gets.

ANSWER

C