Consider a downward-sloping demand curve.Consumer surplus is
A)the difference between the market price of the good and the cost of the good.
B)greater on the last unit sold than on the first unit sold.
C)greater on the first unit sold than on the last unit sold.
D)equal to price multiplied by quantity sold.
E)equal to the area below the demand curve.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual market price they pay. On a downward-sloping demand curve, the first unit sold (at a higher price) has a greater consumer surplus than the last unit sold (at a lower price). Therefore, option C is the correct answer. Options A, B, D, and E are incorrect because they do not accurately describe consumer surplus on a downward-sloping demand curve.

Consider a Downward-Sloping Demand Curve.Consumer Surplus Is