Total surplus measures the
A)loss to buyers from paying higher prices plus the benefit to sellers from receiving lower prices.
B)buyers' willingness to pay less the sellers' costs.
C)fairness of the distribution of resources in society.
D)value to the government of goods and services sold in society.

Question

Quizplus · Accepted Answer

Total surplus is defined as the difference between the buyers' willingness to pay and the sellers' costs. This means that it measures the overall benefit to both buyers and sellers in a market transaction. Option B accurately describes this concept. Option A is incorrect because it implies that the sellers benefit from receiving lower prices, which is not true. Option C is unrelated to the concept of total surplus. Option D is incorrect because the value of goods and services to the government is not the same as the total surplus in a market transaction.

Total Surplus Measures the