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Question

In the standard adjoining diagram, the measure of consumer surplus is

The correct answer is
AB

Consumer surplus is a measure in economics that reflects the difference between what consumers are willing to pay for a good or service versus what they actually do pay. It is essentially the area above the price level and below the demand curve.

Consider the diagram provided:

  1. The demand curve is typically represented by the line extending from point P downward.
  2. The consumer surplus is the area between the demand curve and the horizontal line representing the price level.
  3. Here, point A on the vertical axis represents the price level. The area AB between the price A, the demand curve at P, and the quantity axis at B is the consumer surplus.
  4. Therefore, the consumer surplus is the area AB in the given diagram.

Hence, the correct answer is option AB.

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Important Questions from Consumer behaviour

  1. In the above diagram, the consumer surplus is represented by the area of :

  2. Organization responsible for preventing unfair or deceptive trade practices in textile and textile products is :
  3. The urge to possess and consume for display of wealth is called :
  4. Which of the following factors favour fashion ?
    (a) Leisure
    (b) An economy of abundance
    (c) Transportation and communication
    (d) Low income
    (e) Sumptuary laws
    Code :
  5. Arrange the following Acts in the ascending order of their years of enactment :
    (a) Environmental Protection Act
    (b) MRTP
    (c) PFA
    (d) ISI Certification Marks Act
    (e) Air Pollution Act
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