Consumer surplus is:
A) the difference between the price of a product and consumers' valuation of the last unit of the product purchased.
B) the difference between the price of a product and what consumers were willing to pay for the product.
C) the difference between the discounted price of a product and its retail price.
D) the difference between the price paid by consumers and the price required of producers.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay for a product and what they actually pay. It represents the benefit consumers receive from purchasing a product at a lower price than they were willing to pay. Option A is incorrect because it only considers the last unit purchased, while consumer surplus applies to all units purchased. Option C is incorrect because it relates to a discounted price and not consumers' valuation. Option D is incorrect because it confuses consumer surplus with producer surplus.

Consumer Surplus Is