FIGURE 6- 6
-Refer to Figure 6- 6. Suppose that price is P0. Total consumer surplus is then given by the area
A) under the demand curve to the left of Q0, but above P0.
B) under the demand curve to the left of Q0.
C) under the entire demand curve.
D) above the market price.
E) below P0 and to the left of Q0.

Question

FIGURE 6- 6
-Refer to Figure 6- 6. Suppose that price is P0. Total consumer surplus is then given by the area
A) under the demand curve to the left of Q0, but above P0. 
B) under the demand curve to the left of Q0. 
C) under the entire demand curve. 
D) above the market price. 
E) below P0 and to the left of Q0.

Quizplus · Accepted Answer

Total consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the actual market price. In this case, consumer surplus is represented by the area under the demand curve to the left of Q0 (the quantity bought at price P0), but above P0. This area represents the difference between what consumers are willing to pay (as indicated by the demand curve) and what they actually pay (P0). Therefore, option A is the correct choice.

FIGURE 6- 6 -Refer to Figure 6- 6. Suppose That Price Is P0