Consumer Surplus Is

question 72

Multiple Choice

Consumer surplus is

• A)a concept that helps us make normative statements about the desirability of market outcomes.
• B)represented on a graph by the area below the demand curve and above the price.
• C)a good measure of economic welfare if buyers' preferences are the primary concern.
• D)All of the above are correct.

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Definitions:

Demand Shifts

Refers to the change in the quantity demanded of a good or service at any given price, caused by factors other than the price of the good itself.

New Equilibrium

The state reached when market forces realign, resulting in a new balance between supply and demand after a disturbance.

Total Surplus

The aggregate net benefit to society derived from the production and consumption of a good or service, comprising both consumer and producer surplus.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, achieving a state of market balance.