Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 7 - Consumers, Producers, and the Efficiency of Markets - Questions For Review - Page 151: 1

Answer

Consumer surplus, buyer's willingness to pay, and demand curve all are related. The buyers willingness to pay is reflected as the demand curve's height. The consumer surplus can be found by simply looking from the equilibrium price and going down from the demand curve. This surplus reflects the price that buyers would pay and the actual price they DID pay.

Work Step by Step

Recognize that the demand curve and willingness to pay is reflected in the demand curve. Next find surplus it is below demand curve and above equilibrium price. Finally make sure you can explain what the consumer surplus is ( it is each consumers willing to pay- price actually paid).
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.