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Chapter 3: Q.31 (page 78)

What is consumer surplus? How is it illustrated on a demand and supply diagram?

Short Answer

Expert verified

The difference between what people would have been willing to pay and what they actually paid.

Step by step solution

01

Definition

Microeconomics: Microeconomics is a branch of economics that studies demand and supply mechanisms at the individual level, as well as consumer behavior and other such factors. The stream is critical for understanding the economic status of businesses and consumers.

02

Explanation

The difference between what individuals would have been willing to pay and what they actually paid is known as consumer surplus. Consumer surplus is represented by the area labeled F, which is above the market price and below the demand curve. 1st Illustration.

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