Consumer surplus added to producer surplus provides a measure of the gain to soc

Question

Consumer surplus

added to producer surplus provides a measure of the gain to society from the production and consumption of the good.

is positive for all but the last unit purchased.

for a particular unit of consumption is measured by taking the difference between the market price and the price the consumer would have been willing to pay.

all of the above.

added to producer surplus provides a measure of the gain to society from the production and consumption of the good.

is positive for all but the last unit purchased.

for a particular unit of consumption is measured by taking the difference between the market price and the price the consumer would have been willing to pay.

all of the above.

Explanation / Answer

It is d, all of the above.

Gain to society = Consumer surplus + Producer surplus

Consumer surplus is always positive, since purchasing more units at a prevailing market price gives more surplus amount.

Consumer surplus = ½ × (Units purchased) × (Difference in market price and willing-to-pay price)

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