Figure 7-2
-Refer to Figure 7-2.Which area represents consumer surplus at a price of P1?

Name: Figure 7-2 -Refer to Figure 7-2.Which area represents consumer surplus at a price of P1?
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Question

Figure 7-2 
-Refer to Figure 7-2.Which area represents consumer surplus at a price of P1?

Quizplus · Accepted Answer

Consumer surplus is the difference between the price consumers are willing to pay for a good and the price they actually pay. At a price of P1, consumers are willing to pay up to P2 for the good, but they only have to pay P1. The area ABD represents this difference, so it represents consumer surplus.

Figure 7-2 -Refer to Figure 7-2.Which Area Represents Consumer Surplus at a Surplus