Asked by Bui Cam Tu _ K14 FUG CT on Jul 23, 2024
Verified
Consumer surplus for a given good can be found by computing the area _____ the _____ curve and _____ the price paid for the good.
A) above;supply;below
B) below;supply;above
C) below;demand;above
D) below;demand;below
Demand Curve
A graphical representation that shows the relationship between the price of a good and the quantity demanded by consumers.
- Familiarize oneself with the idea of consumer surplus and its sensitivity to pricing changes.
- Achieve comprehension of the graphical presentation of consumer and producer surplus.
Verified Answer
TS
Tineshwary ShanmugavelJul 29, 2024
Final Answer :
C
Explanation :
Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay. This can be found by computing the area below the demand curve and above the price paid for the good. Thus, choice C is the correct answer as it states that consumer surplus can be found by computing the area below the demand curve and above the price paid for the good.
Learning Objectives
- Familiarize oneself with the idea of consumer surplus and its sensitivity to pricing changes.
- Achieve comprehension of the graphical presentation of consumer and producer surplus.
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