Asked by Sally Suzie on Jul 14, 2024
Verified
We can measure total consumer surplus for good X as the:
A) sum of the individual consumer surpluses for all buyers of X.
B) area above the demand curve for X and below the price paid for X.
C) area bounded by the demand curve for X and the two axes.
D) area above the supply curve for X.
Consumer Surplus
The difference between the total amount that consumers are willing to pay and the total amount that they actually pay.
Demand Curve
A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.
- Get to know the concept of consumer surplus and its linkage to fluctuations in price.
- Grasp the methodology for calculating consumer surplus in various market scenarios.
Verified Answer
EM
Estefanny MoralesJul 16, 2024
Final Answer :
A
Explanation :
Total consumer surplus for a good is calculated as the sum of the individual consumer surpluses for all buyers of that good. This is because consumer surplus is the difference between what consumers are willing to pay and what they actually pay, summed across all consumers.
Learning Objectives
- Get to know the concept of consumer surplus and its linkage to fluctuations in price.
- Grasp the methodology for calculating consumer surplus in various market scenarios.