The figure below shows the market equilibrium (point B) at the intersection of demand and supply curves under perfect competition. Figure 10.5
D: Market demand curve
S: Market supply curve
-Refer to Figure 10.5.Which of the following regions on the graph represents consumer surplus in a perfectly competitive market?

Question

The figure below shows the market equilibrium (point B) at the intersection of demand and supply curves under perfect competition. Figure 10.5

D: Market demand curve
S: Market supply curve
-Refer to Figure 10.5.Which of the following regions on the graph represents consumer surplus in a perfectly competitive market?

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay for a good and what they actually pay. In a perfectly competitive market, consumer surplus is represented by the area above the market price and below the demand curve (up to the point of equilibrium). This is the area P_PCBA in the graph.

The Figure Below Shows the Market Equilibrium (Point B) at the Intersection