Assume an individual with a downward- sloping demand curve is paying a single price for each unit of some commodity. He will get consumer surplus on
A) none of the units.
B) the first unit only.
C) all units bought with the possible exception of the last unit.
D) all of the units bought.
E) all units that were not bought at that particular price.

Question

Quizplus · Accepted Answer

A consumer gains consumer surplus from each unit consumed up to the point where the marginal willingness to pay equals the price. Therefore, for a downward-sloping demand curve, the consumer will gain consumer surplus on all units bought up to the point where the marginal willingness to pay equals the price, which is the possible exception of the last unit. Therefore, the correct answer is C.

Assume an Individual with a Downward- Sloping Demand Curve Is