Figure 3-17. -Refer to Figure 3-17. When the price is P₁, consumer surplus is A) A. B) A + B. C) A + B + C. D) A + B + D.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the price consumers are willing to pay for a good and the price they actually pay. When the price is P1, consumers are willing to pay up to P2 for the good, but they only have to pay P1. Therefore, consumer surplus is equal to the area A + B + C.

Figure 3-17. -Refer to Figure 3-17. When the Price Is P1, Consumer

Figure 3-17. -Refer to Figure 3-17. When the Price Is P₁, Consumer