When demand and supply are linear, consumer surplus is equal to:
A) the area between the demand curve and the price, out to the quantity that is exchanged.
B) the area between the supply curve and the price, out to the quantity that is exchanged.
C) the entire area between the demand curve and the horizontal axis.
D) the entire area below the demand curve, out to the quantity that is exchanged.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay and what they actually pay. It is represented by the area between the demand curve and the price line, extending out to the quantity exchanged.

When Demand and Supply Are Linear, Consumer Surplus Is Equal