Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6
-In figure 4.6 if price is P1, consumer surplus is area
A) A.
B) A+B+E.
C) G.
D) B+C+E+F+G.

Question

Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D.  Figure 4.6
-In figure 4.6 if price is P1, consumer surplus is area
A) A. 
B) A+B+E. 
C) G. 
D) B+C+E+F+G.

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay for a good or service (as shown by the demand curve) and what they actually have to pay (the equilibrium price). At price level P1, consumer surplus is the area between the demand curve (D) and the price line (P1) up to the equilibrium quantity. This area includes A, B, and E. Therefore, the correct answer is B.

Refer to the Information Provided in Figure 4