-In Figure 32.1, at the market price-quantity combination where production is unlimited and the government buys the excess, the consumer surplus is

Question

Quizplus · Accepted Answer

Consumer surplus is the area above the price level and below the demand curve, up to the quantity demanded. In this scenario, the area AP_floorB represents the consumer surplus, as it is above the market price (P*) and below the demand curve, extending to the quantity where the government starts buying the excess.