Which of the following best describes consumer surplus in microeconomics?

• A. The difference between the market price and the cost of production
• B. The difference between what a consumer is willing to pay for a good and what they actually pay
• C. The amount of goods a consumer purchases at a given price
• D. The total amount paid by consumers for a good

Answer: (B)

Verified step by step guidance

1. Understand that consumer surplus measures the benefit consumers receive when they pay less for a good than the maximum amount they are willing to pay.
2. Recall that consumer surplus is calculated as the difference between the consumer's willingness to pay and the actual market price paid.
3. Recognize that it is not related to the cost of production or the total amount paid, but rather the extra value or utility consumers gain.
4. Identify that consumer surplus is a concept that reflects consumer satisfaction and economic welfare in microeconomics.
5. Therefore, the best description of consumer surplus is: the difference between what a consumer is willing to pay for a good and what they actually pay.