If all customers are charged the same price and the demand curve is downward sloping, consumers' surplus is always less than:
A)total revenue minus total cost.
B)the excess of revenues over the minimum amount necessary to produce output.
C)total revenues.
D)the value of output to consumers above and beyond the amount paid to producers.

Question

Quizplus · Accepted Answer

Consumers' surplus is the difference between what consumers are willing to pay for a product and what they actually pay. If all customers are charged the same price, then the price is likely set at the point where the demand curve intersects with the supply curve. This means that all consumers are paying the same price, which is the market price. Therefore, consumers' surplus will always be less than the total revenues generated from the sales of the product (choice C). Total revenue represents the amount of money received by producers from the sale of a good or service, while consumers' surplus represents the value that consumers receive from consuming the good or service above and beyond the amount paid to producers. Hence, C is the best choice.

If All Customers Are Charged the Same Price and the Demand