The following diagram shows the market demand schedule for a good. When the price of the good is P, the shaded area represents:
Figure 6.5

A)shortage.
B)marginal utility of the good.
C)price floor.
D)consumer surplus.
E)marginal valuation of the good.

Question

The following diagram shows the market demand schedule for a good. When the price of the good is P, the shaded area represents: ​
Figure 6.5

A)shortage. 
B)marginal utility of the good. 
C)price floor. 
D)consumer surplus. 
E)marginal valuation of the good.

Quizplus · Accepted Answer

The shaded area represents the amount of consumer surplus, which is the difference between what consumers are willing to pay (marginal valuation) and what they actually pay (the market price). Therefore, the correct choice is D, which stands for "consumer surplus."

The Following Diagram Shows the Market Demand Schedule for a Good