Consumer surplus is shown graphically as the area:

• A. between the supply curve and the market price, up to the quantity sold
• B. above the supply curve and below the demand curve for all quantities
• C. between the demand curve and the market price, up to the quantity purchased
• D. below the demand curve and above the equilibrium price for all possible quantities

Answer: (C)

Verified step by step guidance

1. Recall the definition of consumer surplus: it is the difference between what consumers are willing to pay for a good (represented by the demand curve) and what they actually pay (the market price).
2. Graphically, consumer surplus is represented as the area between the demand curve and the market price line, up to the quantity purchased in the market.
3. Understand that the supply curve relates to producers' costs and is not directly involved in measuring consumer surplus; instead, it helps determine the equilibrium price and quantity.
4. Identify the market price on the graph and draw a horizontal line at this price level from the y-axis to the quantity purchased on the x-axis.
5. The consumer surplus is the area above this market price line and below the demand curve, extending from zero quantity to the quantity purchased.