Which of the following statements is correct?
A) Consumer surplus equals the price paid for a good.
B) The consumer surplus from a good is always larger than the total benefit from the good.
C) An increase in price decreases consumer surplus.
D) An increase in price has no effect on consumer surplus.
E) The consumer surplus from a good or service must always equal producer surplus.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay. An increase in price leads to a decrease in the consumer surplus because consumers are no longer willing to pay the same amount for the good. Therefore, statement C is correct. Statements A, B, D, and E are incorrect.

Which of the Following Statements Is Correct