Figure 7-4
-Refer to Figure 7-4.Which area represents consumer surplus at a price of P1?
A)BDF
B)AFG
C)ABDG
D)ABC

Question

Figure 7-4 
-Refer to Figure 7-4.Which area represents consumer surplus at a price of P1?
A)BDF 
B)AFG 
C)ABDG 
D)ABC

Quizplus · Accepted Answer

Consumer surplus is the difference between the price consumers are willing to pay for a good and the price they actually pay. At a price of P1, consumers are willing to pay up to P2 for the good, but they only have to pay P1. Therefore, the consumer surplus is the area between the demand curve and the price line at P1, which is area BDF.

Figure 7-4 -Refer to Figure 7-4.Which Area Represents Consumer Surplus at a Surplus