Consumer surplus is a good measure of economic welfare if policymakers want to
A)maximize total benefit.
B)minimize deadweight loss.
C)respect the preferences of sellers.
D)respect the preferences of buyers.

Question

Quizplus · Accepted Answer

Consumer surplus represents the difference between what consumers are willing to pay for a good and what they actually pay. It captures the welfare gain that consumers receive from purchasing the good at a lower price than they would have been willing to pay. Therefore, if policymakers want to respect the preferences of buyers and maximize their economic welfare, consumer surplus can be a helpful measure. Options A and B are also valid considerations, but respect for sellers' preferences is not directly related to the concept of consumer surplus.

Consumer Surplus Is a Good Measure of Economic Welfare If