The difference between the price consumers are willing to pay and the price that they actually pay is known as: A) price discrimination

Economics Dec 13, 2020

The difference between the price consumers are willing to pay and the price that they actually pay is known as:

A) price discrimination.

B) government surplus.

C) producer surplus.

D) consumer surplus

Expert Solution

The answer is the difference between the price consumers are willing to pay, and the price they actually pay is known as D) consumer surplus.

The sketch below shows the consumer surplus in the market. The shaded area, which forms a triangle at the equilibrium price and quantity and the vertical intercept of the demand line, is the consumer surplus.

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