Consumer surplus
A)is a concept that helps us make normative statements about the desirability of market outcomes.
B)is represented on a graph by the area below the demand curve and above the price.
C)is a good measure of economic welfare if buyers' preferences are the primary concern.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Consumer surplus is a measure of the difference between the total value that consumers place on a good or service and the total amount that they actually pay for it. It can be used as a normative tool to evaluate the desirability of market outcomes (A), it is represented on a graph by the area below the demand curve and above the price (B), and it is a good measure of economic welfare if buyers' preferences are the primary concern (C). All of these statements are correct.

Consumer Surplus