The diagram below shows the market demand curve and the cost curves for a single firm.
FIGURE 12- 6
-Which of the following is the definition of consumer surplus?

Question

The diagram below shows the market demand curve and the cost curves for a single firm.
  FIGURE 12- 6
-Which of the following is the definition of consumer surplus?

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price that a consumer is willing to pay for a good and the actual price paid for that good. In other words, it is the value that consumers place on a good minus the payment made to buy the good, summed over the quantity consumed. Choice A and B are incorrect because they refer to the value placed on the last unit consumed, while consumer surplus is calculated over the entire quantity consumed. Choice C is incorrect because it refers to the quantity consumed, while consumer surplus is calculated based on the difference between willingness to pay and actual payment. Choice D is partially correct, but it does not include the payment made to buy the good.

The Diagram Below Shows the Market Demand Curve and the Cost