Which of the following best explains the source of consumer surplus for a good?
A) Many consumers would be willing to pay more than the market price for the good.
B) Many consumers pay prices that are greater than the equilibrium price of the good.
C) Many consumers think the market price of the good is greater than its cost.
D) Many consumers think the price elasticity of demand for the good is unit elastic.

Question

Quizplus · Accepted Answer

Consumer surplus exists when the market price of a good is lower than the price that consumers are willing to pay for it. This means that many consumers are willing to pay more than the market price, which creates a surplus of value for them.

Which of the Following Best Explains the Source of Consumer