At a zero price,the consumer surplus of all buyers in a market _____
A)is equal to zero.
B)is equal to the value of the total utility derived from the consumption of goods.
C)is greater than the value of the total utility derived from the consumption of goods.
D)is equal to the value of the marginal utility of additional units of goods.
E)is less than the value of the total utility derived from the consumption of goods.

Question

Quizplus · Accepted Answer

At a zero price, the consumer surplus of all buyers in a market is equal to the value of the total utility derived from the consumption of goods. This is because the consumer surplus is the difference between the maximum price that a consumer is willing to pay for a good and the actual price of the good. At a zero price, the actual price is zero, and therefore the consumer surplus is equal to the maximum price (or value) that the consumer places on the good, which is equivalent to the total utility derived from the consumption of the good.

At a Zero Price,the Consumer Surplus of All Buyers in a Market