Question

Consumer surplus is___________.

A. the highest price a consumer is willing to pay to consume a good or service.
B. the difference between the highest price a consumer is willing to pay and the lowest price a firm would be willing to accept.
C. the difference between the highest price a consumer is willing to pay and marginal benefit.
D. the difference between the lowest price a firm would be willing to accept and the price it actually receives.
E. the difference between the highest price a consumer is willing to pay and the price the consumer actually pays.

Answer 1

Answer: Option E

Explanation: Consumer surplus is a reflection of consumer benefits economically. Consumer surplus arises when the price consumers pay for a product or service is lower than the value they are prepared to pay.

It's a representation of the extra benefit customers get because they spend less for anything than they're ready to pay. Consumer surplus is centered on the marginal benefit economic theory, which seems to be the added value that a consumer receives from another segment of a product or service.

Thus, from the above we can conclude that the correct option is E .