The supply-demand model shown here includes areas of surplus labeled with the letters $A$ through $F$.
A market in equilibrium

What area(s) in this graph represent consumer surplus at the equilibrium price?

Choose 1 answer:
(A) $D+E+F$
(B) $A+B$
(C) $A+B+C$
(D) $A$
(E) $C+E$

Question

The supply-demand model shown here includes areas of surplus labeled with the letters $A$ through $F$.
A market in equilibrium

What area(s) in this graph represent consumer surplus at the equilibrium price?

Choose 1 answer:
(A) $D+E+F$
(B) $A+B$
(C) $A+B+C$
(D) $A$
(E) $C+E$

Accepted Answer

∻Solution∻ ‖ a ⋮ Consumer Surplus Definition: Consumer surplus is the difference between what consumers are willing to pay for a good or service (represented by the demand curve) and what they actually pay (the market price). ‖ ‖ b ⋮ Identifying Consumer Surplus on the Graph: In the supply-demand model, consumer surplus is represented by the area above the equilibrium price and below the demand curve. ‖ ∻Answer∻ ⚹ (D) $A$ ⚹ ∻Key Concept∻ ⚹ Consumer Surplus in a Supply-Demand Graph ⚹ ∻Explanation∻ ⚹ Consumer surplus is the area above the market equilibrium price and below the demand curve, which corresponds to area $A$ in the given graph. ⚹◊In macroeconomics, how does consumer surplus contribute to overall economic welfare within a market equilibrium?⍭ Generate me a similar question◊

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