Consumer surplus

Question

Consumer surplus

Quizplus · Accepted Answer

All of the given statements are true about consumer surplus. Option A is true because consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price paid, and is thus positive for all purchases except for the last one where the consumer is just indifferent between paying the price and not buying the product. Option B is true because consumer surplus for a particular unit of consumption is the difference between the willingness to pay and the market price. Option C is true because it is the sum of the consumer surplus for all units of the good consumed, and represents the benefit that consumers receive from paying less than the maximum they were willing to pay. Option D is true because the sum of consumer and producer surplus gives us the total economic surplus or total benefit from a transaction, which is a measure of the net gain to society from the production and consumption of the good.

Consumer Surplus