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The difference between the value of the product and its price remains with the customer as consumer surplus

Economics

The difference between the value of the product and its price remains with the customer as consumer surplus.

a. True

b. False

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  • The given statement is TRUE.

If the consumer expects a product to provide a higher utility level, he/she will estimate a higher value of the product, and the willingness to pay would also be higher. The relation between demand and supply sets the market price. If the consumer is getting a product at a lower price for which he/she has estimated a higher value, the person will get a surplus or benefit.