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

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what a consumer is willing to pay for a good and what they actually pay. In a typical downward-sloping demand curve at equilibrium, the consumer surplus can be measured by the area above the market price and under the demand curve. This represents the difference between the maximum amount a consumer is willing to pay and the market price they actually pay.

Given a Typical Downward-Sloping Demand Curve in a Market That