Total surplus is:
A) the difference between the price and the cost to the seller.
B) the sum of consumer surplus and producer surplus.
C) equal to the area below the demand curve.
D) always more for consumers than for producers.

Question

Quizplus · Accepted Answer

Total surplus is the sum of consumer surplus (the difference between what consumers are willing to pay and what they actually pay) and producer surplus (the difference between the price received by producers and the cost to produce). Therefore, choice B is correct. Choice A is incorrect because it only represents producer surplus. Choice C is incorrect because it only represents consumer surplus. Choice D is incorrect because total surplus can be greater for producers depending on market conditions.

Total Surplus Is