Asked by Janecia Britt on May 30, 2024
Verified
Graphically,if the supply and demand curves are linear,consumer surplus is measured as the triangle:
A) under the demand curve and below the actual price.
B) under the demand curve and above the actual price.
C) above the supply curve and above the actual price.
D) above the supply curve and below the actual price.
Consumer Surplus
The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.
Supply Curve
A graphical representation showing how the quantity of goods supplied by producers changes in response to different price levels.
Demand Curve
A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing and able to purchase at different prices.
- Attain an understanding of the ideas underlying producer and consumer surplus.
Verified Answer
SJ
Sonet JacksiMay 30, 2024
Final Answer :
B
Explanation :
Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and the actual price that they pay. Graphically, consumer surplus is measured as the area under the demand curve and above the actual price. Therefore, the correct choice is B, which describes the area under the demand curve and above the actual price.
Learning Objectives
- Attain an understanding of the ideas underlying producer and consumer surplus.