Question

Consumer surplus is the area in graph–
(A) below the demand curve and above price line
(B) above the supply curve and below price line
(C) above the demand curve and below the price line
(D) below the demand curve and above the supply curve

Answer 1

The correct answer is 'A'

(A) below the demand curve and above price line

Consumer surplus is the area in graph below the demand curve and above price line.

Consumer surplus is refereed to when the consumers pay a price less than the price they were prepared to pay. It can also be called the economic measure of consumer benefit. A consumer surplus occurs when the consumer is willing to pay more for a given product than the current market price.