Answer :
Final answer:
Consumer surplus refers to the extra benefit that consumers get when they buy a good or service, calculated as the difference between what they're willing to pay and the actual price they pay. In a graph, it's represented as the area below the demand curve and above the actual price line.
the correct answer is 'c. marginal benefit minus price'
Explanation:
The question asks about the definition of consumer surplus. Consumer surplus is the extra benefit that buyers receive when they purchase a good or service. It's calculated as the difference between the price the consumers are willing to pay (their marginal benefit) and the price they actually pay. Thus, the correct answer is 'c. marginal benefit minus price'.
To illustrate this, imagine a consumer is willing to pay $15 for a book, but the market price is only $10. The consumer surplus for this buyer is $5 ($15 marginal benefit - $10 price). The aggregate consumer surplus is the area below the demand curve and above the market price line in a demand-supply graph. Understanding consumer surplus helps figure out how much value consumers are getting from the market transactions, which can in turn inform policies and market strategies.
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