Consumer surplus equals
A) producer surplus at a market equilibrium.
B) marginal benefit minus price, summed over the quantity consumed.
C) price minus marginal cost.
D) the deadweight loss if there is underproduction.
E) the deadweight loss plus the producer surplus.

Question

Quizplus · Accepted Answer

Consumer surplus refers to the difference between the highest price a consumer is willing to pay for a good or service and the actual market price they pay. This can be calculated by taking the total value or marginal benefit a consumer receives from a good, and subtracting the price they pay for it. Therefore, the correct option is B, which defines consumer surplus as the difference between marginal benefit and price summed over the quantity consumed.

Consumer Surplus Equals