Consumer surplus is
A) The amount of purchasing power a consumer receives when the price of a good falls
B) The amount of money that exactly compensates a consumer for a change in circumstances
C) The net benefit a consumer receives from participating in the market for some good
D) Negative whenever the price of a good increases

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good or service and the actual amount they have to pay in the market. It represents the net benefit a consumer receives from participating in the market for some good, and can be thought of as the area under the demand curve and above the market price. Therefore, option C is the correct answer as it defines consumer surplus accurately.

Consumer Surplus Is