Question

What is the difference between a consumer surplus and a producer surplus?

• A. Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the price they actually pay, while producer surplus is the difference between the minimum price a producer is willing to accept for a good and the price they actually receive.
• B. Consumer surplus is the difference between the average price a consumer pays for a good and the price they would be willing to pay for the last unit of the goods, while producer surplus is the difference between the average price a producer receives for a good and the price they would be willing to accept for the last unit of the goods.
• C. Consumer surplus is the difference between the total value a consumer receives from consuming a good and the total price they pay for the goods, while producer surplus is the difference between the total value a producer receives from producing a good and the total cost of producing the goods.
• D. Consumer surplus is the difference between the marginal benefit a consumer receives from consuming a good and the marginal cost of producing the goods, while producer surplus is the difference between the marginal revenue a producer receives from producing a good and the marginal cost of producing the goods

Answer 1

Answer: (C)

Consumer surplus is the difference between the total value a consumer receives from consuming a good and the total price they pay for the goods, while producer surplus is the difference between the total value a producer receives from producing a good and the total cost of producing the goods.

Answer 2

The correct option is (B): Consumer surplus is the difference between the total value a consumer receives from consuming a good and the total price they pay for the goods, while producer surplus is the difference between the total value a producer receives from producing a good and the total cost of producing the goods.