Which of the following is true of consumer surplus?
A)It is graphically represented as the area under the equilibrium price and above the supply curve of a good.
B)It is the net gain in economic well-being associated with producing and selling the equilibrium quantity of a good.
C)It is used to measure the impact of a change in price on the economic well-being of the producers.
D)It is the difference between the value that one places on a good and the price paid for the good.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the market price they actually pay. Therefore, option D, which says that it is the difference between the value that one places on a good and the price paid for the good, is true. Options A, B, and C are incorrect as they do not accurately describe consumer surplus.

Which of the Following Is True of Consumer Surplus