Figure 5-2

-In Figure 5-2, consumer surplus is measured by the area

Question

Figure 5-2
 
-In Figure 5-2, consumer surplus is measured by the area

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay. In this figure, the area representing consumer surplus is the triangle ABC, which is formed by the demand curve, the price line (which intersects the demand curve at point B), and the y-axis. The other areas (OBCD, OACD, and DCE) represent producer surplus or deadweight loss. Therefore, the correct choice is A.

Figure 5-2 -In Figure 5-2, Consumer Surplus Is Measured by the Area