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Graphically, total consumer surplus in a market is represented by the area:
Aabove the demand curve and below the price
Bbetween the budget line and the axes
Cbelow the demand curve and above the price
Dbelow both the demand curve and price
Answer & Solution
Correct answer: C. below the demand curve and above the price
1. The demand curve shows willingness to pay and price is the amount actually paid.
2. The gap, summed across buyers, is the area below the demand curve but above the price line.
3. The reversed and budget-line descriptions do not capture this gap, so those options are wrong.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit II "Theory of Consumer Behaviour", p.9_
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