Question

Total surplus in a market is the total costs to sellers of providing the goods less the total value to buyers of the goods. This is represented as:

a) Total Revenue
b) Producer Surplus
c) Consumer Surplus
d) Total Profit

Answer 1

Consumer surplus is the gap between the price that consumers are willing to pay and the market equilibrium price.

Step-by-step explanation:

Consumer surplus is the gap between the price that consumers are willing to pay, based on their preferences, and the market equilibrium price. Producer surplus is the gap between the price for which producers are willing to sell a product, based on their costs, and the market equilibrium price. Social surplus is the sum of consumer surplus and producer surplus. Total surplus is larger at the equilibrium quantity and price than it will be at any other quantity and price. Deadweight loss is loss in total surplus that occurs when the economy produces at an inefficient quantity.