Which of the following best describes the concept of consumer surplus in microeconomics?

• A. The maximum price a seller is willing to accept for a good.
• B. The profit earned by firms from selling goods at market price.
• C. The total amount paid by consumers for a good or service.
• D. The difference between what a consumer is willing to pay for a good and what the consumer actually pays.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the concept of consumer surplus. Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay in the market.
2. Step 2: Recognize that consumer surplus measures the benefit or gain consumers receive when they pay less than what they were prepared to pay.
3. Step 3: Differentiate consumer surplus from other concepts such as producer surplus (profit earned by firms) and total expenditure (the total amount paid by consumers).
4. Step 4: Identify that the correct description of consumer surplus is: 'The difference between what a consumer is willing to pay for a good and what the consumer actually pays.'
5. Step 5: Confirm that this definition captures the essence of consumer surplus as a measure of consumer welfare in microeconomics.