The figure below shows the market equilibrium (point B) at the intersection of demand and supply curves under perfect competition.Figure 11.5
D: Market demand curve
S: Market supply curve
-Refer to Figure 11.5. Which of the following regions on the graph represents consumer surplus in a perfectly competitive market?

Question

The figure below shows the market equilibrium (point B) at the intersection of demand and supply curves under perfect competition.Figure 11.5

D: Market demand curve
S: Market supply curve
-Refer to Figure 11.5. Which of the following regions on the graph represents consumer surplus in a perfectly competitive market?

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good and the price they actually pay. In a perfectly competitive market, consumer surplus is represented by the area above the market price (PB) and below the demand curve (D), up to the quantity traded (QB). This is shown by the area P_PCBA. Therefore, the correct answer is A.

The Figure Below Shows the Market Equilibrium (Point B) at the Intersection