[amp_mcq option1=”the area of the triangle formed by the demand curve, the price axis and the equilibrium price line” option2=”the area between the average revenue and marginal revenue curves” option3=”the difference between the maximum price the consumer is willing to pay for a good (vertical intercept of demand curve) and the minimum price the producer is willing to sell at (vertical intercept of supply curve)” option4=”Both A and C” correct=”option4″]<\/p>\n
The correct answer is D. Both A and C.<\/p>\n
Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the price they actually pay. It is represented by the area below the demand curve and above the price line.<\/p>\n
The maximum price a consumer is willing to pay is the vertical intercept of the demand curve. The minimum price a producer is willing to sell at is the vertical intercept of the supply curve. The area between the demand curve and the supply curve is the total value that consumers receive from consuming the good.<\/p>\n
The area of the triangle formed by the demand curve, the price axis, and the equilibrium price line is also equal to consumer surplus. This is because the triangle is bounded by the demand curve, which represents the maximum price consumers are willing to pay, the price axis, which represents the price consumers actually pay, and the equilibrium price line, which represents the price at which the market clears.<\/p>\n
Therefore, both A and C are correct.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”the area of the triangle formed by the demand curve, the price axis and the equilibrium price line” option2=”the area between the average revenue and marginal revenue curves” option3=”the difference between the maximum price the consumer is willing to pay for a good (vertical intercept of demand curve) and the minimum price the producer … <\/p>\n