Given a typical downward- sloping demand curve in a market that has reached its equilibrium,the consumer surplus
A)is calculated as the product of market price and quantity consumed.
B)is measured by the area above the market price and under the demand curve.
C)is measured by the area below the market price and under the demand curve.
D)is measured by the area immediately above the demand curve.
E)cannot be measured given the information.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum price a consumer is willing to pay and the market price. In a typical downward-sloping demand curve in equilibrium, the consumer surplus is measured by the area above the market price and under the demand curve. This represents the difference between what consumers are willing to pay (as shown by the demand curve) and what they actually pay (the market price).

Given a Typical Downward- Sloping Demand Curve in a Market