Given a particular market demand curve,consumer surplus is
A)less the lower the price and the smaller the output.
B)less the lower the price and the larger the output.
C)greater the higher the price and the smaller the output.
D)greater the lower the price and the smaller the output.
E)greater the lower the price and the larger the output.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the actual price they have to pay. As the price of the good decreases, consumer surplus increases because consumers are willing to pay more than the actual price. Similarly, as the output of the good increases, consumer surplus also increases as more consumers are able to purchase the good at a lower price. Therefore, the greatest consumer surplus would occur at a lower price and a larger output, leading to choice E as the correct answer.

Given a Particular Market Demand Curve,consumer Surplus Is