The diagram below shows the demand and supply curves in a perfectly competitive market. FIGURE 12-5
-Refer to Figure 12-5.At the free-market equilibrium,consumer surplus is represented by the area

Question

The diagram below shows the demand and supply curves in a perfectly competitive market.

FIGURE 12-5
-Refer to Figure 12-5.At the free-market equilibrium,consumer surplus is represented by the area

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 the free-market equilibrium, the price consumers are willing to pay is represented by the demand curve, and the price they actually pay is represented by the supply curve. The area between the demand curve and the supply curve represents the consumer surplus.

The Diagram Below Shows the Demand and Supply Curves in a Perfectly