Which of the following best describes consumer surplus in the context of a consumer's willingness to pay for a product?

• A. The profit a company earns from selling multiple products.
• B. The combination of products sold by a company to maximize revenue.
• C. The difference between what a consumer is willing to pay and what they actually pay for a product.
• D. The total amount a consumer spends on all products in a sales mix.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of consumer surplus. Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a product and the actual price they pay for it.
2. Step 2: Recognize that consumer surplus measures the benefit or gain a consumer receives when they pay less than their willingness to pay.
3. Step 3: Compare the given options to the definition of consumer surplus. The correct description should highlight the difference between willingness to pay and actual payment.
4. Step 4: Eliminate options that describe company profits, product combinations, or total spending, as these relate to producer or company perspectives, not consumer surplus.
5. Step 5: Conclude that the best description of consumer surplus is: 'The difference between what a consumer is willing to pay and what they actually pay for a product.'