Question

When there are many buyers in the market for backpacks, a. the total consumer surplus will be the area above the demand curve to the left of the equilibrium quantity b. the total consumer surplus will be the area beneath the demand curve but above the current price of backpacks c. consumer surplus will be zero d. they all receive the same amount of consumer surplus.

Answer 1

Answer:

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

Explanation:

Demand curve is a representation of the relationship between the price of a good and the quantity of good that consumers are willing to buy. When graphed, it is usually customary to record the different prices on the vertical axis and the respective quantities demanded on the horizontal axis.

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.