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 unit of goods.
E)is lesser than the value of the total utility derived from the consumption of goods.

Question

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 unit of goods.
E)is lesser than the value of the total utility derived from the consumption of goods.

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 consumers can consume as much as they want without any cost, resulting in the maximum possible consumer surplus. However, this does not mean that consumer surplus is greater than the value of total utility or the marginal utility of additional units of goods, as these concepts are not directly related to price.

At a Zero Price, the Consumer Surplus of All Buyers