Question

Consumer surplus arises in a market because
A) some consumers are willing to pay more than the equilibrium price but do not need to do so
B) some consumers are willing to pay less than the equilibrium price but do not need to do so
C) at market price, the quantity demanded is less than the quantity supplied
D) at market price, the quantity demanded is greater than the quantity supplied

Answer 1

Correct option


B) some consumers are willing to pay less than the equilibrium price but do not need to do so

Answer 2

Consumer surplus refers to the difference a consumer is ready to pay for good, services or product and the market rate. In simple terms the difference between what one pays and the actual price indicates the amount of surplus.

Drinking water is a good example of consumer surplus. We as a human are willing to pay higher prices for it, as it is essential for survival.

Option A is correct.