Consumer surplus is the ________.
A) difference between the buyer's reservation value and the price he actually pays
B) product of a buyer's reservation value and the price he actually pays
C) sum of a buyer's reservation value and the price he actually pays
D) ratio of a buyer's reservation value to the price he actually pays

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay (reservation value) and the actual price they pay. Option A correctly explains this concept. Option B is incorrect because it multiplies the two values rather than subtracting. Option C and D are also incorrect and do not represent the definition of consumer surplus.

Consumer Surplus Is the ________