Question

PLEASE HELP!

Draw a set of supply and demand curves and explain, with reference to the graph, why the term consumer surplus is described as a “surplus” or benefit to consumers from trade.

Answer 1

b. the total consumer surplus will be the area beneath the demand curve but above the current price of backpacks

Step-by-step explanation:

A situation where there are many buyers in the backpack market indicates that the demand for this product is high, so the consumer surplus that will be received by the backpack manufacturer will depend on how much the consumer is willing to pay for the backpack, in which case Total consumer surplus will be the area below the demand curve, but above the current price of the backpacks.

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