"Consumer surplus" is:
A)The difference between the price customers expect to pay, and the price they would have been willing to pay
B)The total of all the differences between the price each customer actually pays and the maximum price they would have been willing to pay, all other things being equal.
C)The difference between the costs incurred in serving customers, and the revenue that they generate
D)The amount of extra product consumers buy because of the difference between the normal price and a special offer price.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the price customers actually pay for a good or service and the maximum price they would have been willing to pay, all other things being equal. It represents the benefit that consumers receive beyond what they actually paid, and can be used as a measure of consumer welfare. Option A is incorrect because it only considers expected price, not actual price. Option C is incorrect because it describes profit, not consumer surplus. Option D is incorrect because it describes a sales promotion, not consumer surplus.

"Consumer Surplus" Is