As a result of consumer surplus, a firm typically charges a lower pric

QUESTION

As a result of consumer surplus, a firm typically charges a lower price for a good or service than the value placed on it by customers because:

A. the value creation results in a corresponding reduction in costs of production.

B. it is highly unlikely that the same good or service will be available to the customers from other firms.

C. the firm is competing with other firms for the customer’s business.

D. the firm charges a price that reveals a consumer’s assessment of the product’s value.

E. the firm creates value for the customer by producing a wide range of products.

ANSWER

C