Consider the market for coffee, where the demand and supply equations are given by: Demand: Qd = 200 - 3P, Supply: Qs = 20 + 2P. What does consumer surplus represent in this market?
The difference between the equilibrium price and the minimum price consumers are willing to pay.
The difference between the equilibrium price and the maximum price consumers are willing to pay.
The difference between the equilibrium quantity and the quantity demanded at the minimum price.
The difference between the equilibrium quantity and the quantity supplied at the maximum price.
1 answer
The correct answer is: The difference between the equilibrium price and the maximum price consumers are willing to pay.
1 answer