In the context of microeconomics, which of the following best describes consumer surplus?

• A. The maximum price a producer is willing to accept for a good.
• B. The profit earned by producers from selling goods to consumers.
• 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 they actually pay.

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: Identify that the other options describe different economic concepts: the maximum price a producer is willing to accept relates to producer reservation price, profit earned by producers relates to producer surplus or profit, and the total amount paid by consumers is simply the expenditure, not the surplus.
4. Step 4: Formally, consumer surplus can be expressed as \(\text{Consumer Surplus} = \text{Willingness to Pay} - \text{Actual Price Paid}\).
5. Step 5: Conclude that 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.