Question

Consumer surplus arises in a market because rev: 05_10_2018 Multiple Choice at the current market price, quantity supplied is greater than quantity demanded. at the current market price, quantity demanded is greater than quantity supplied. the market price is below what some consumers are willing to pay for the product. the market price is higher than what some consumers are willing to pay for the product.

Answer 1

Answer:

The market price is below what some consumers are willing to pay for the product.

Explanation:

Consumer surplus refers to the benefit that a consumer can get by purchasing the product. It is the difference between the consumer's willingness to pay for the product and the price actually paid by the consumer for the product.

Consumer surplus = Consumer's willingness to pay - Market price

Whenever consumer's willingness to pay is higher than the market price, then consumer surplus is out to be positive.