Exhibit 7-6 Refer to Exhibit 7-6.If the market price equals P₂,consumer surplus can be identified in the diagram as area:

Question

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Consumer surplus is the difference between the maximum amount that the consumer is willing to pay for a good and the actual market price. In the diagram, area A represents the maximum amount that consumers are willing to pay for the quantity Q1. Areas B and E represent the actual amount that consumers pay for the same quantity. Therefore, consumer surplus can be identified as the sum of areas A, B, and E.