Question

The benefit that consumers get when they buy goods at the equilibrium price but were willing to pay more is called:

A) Producer Surplus
B) Consumer Surplus
C) Marginal Utility
D) Price Elasticity

Answer 1

Consumer Surplus is the economic term for the benefit consumers receive when they purchase goods for less than the maximum price they are willing to pay.

Step-by-step explanation:

The benefit that consumers receive when they buy goods at the equilibrium price but were willing to pay more for them is termed as Consumer Surplus. This economic concept refers to the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually do pay. To illustrate, let's consider a market scenario for tablets. If the equilibrium price is $80, yet consumers would be willing to pay $90 for the tablet to receive the utility they expect from it, the extra $10 they would have been willing to pay but didn't have to is the consumer surplus. This surplus is represented graphically as the area above the market price and below the demand curve, which is labeled F in economic models.