Given a particular market demand curve, consumer surplus is
A) greater the lower the price and the larger the output.
B) less the lower the price and the larger the output.
C) greater the lower the price and the smaller the output.
D) less the lower the price and the smaller the output.
E) greater the higher the price and the smaller the output.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay. As price decreases, consumer surplus increases, because consumers are able to purchase more for less than they were originally willing to pay. Similarly, as output increases, consumer surplus also increases, because consumers have more of the good or service available to them at a lower price. Therefore, option A is the correct choice.

Given a Particular Market Demand Curve, Consumer Surplus Is