Consider the diagram below which shows a demand curve (d). Total expenditure on a commodity is represented by the area TUVW. Consumer's surplus is represent...

Consider the diagram below which shows a demand curve (d).

Total expenditure on a commodity is represented by the area TUVW. Consumer's surplus is represented by__________

Answer Details

Consumer's surplus is represented by the area above the demand curve and below the market price. In the diagram, this would be the area represented by VWX. Consumer's surplus measures the difference between the amount that consumers are willing to pay for a good and the amount they actually pay. In the diagram, consumers are willing to pay more for the good up to the market price, represented by the height of the demand curve. The area VWX represents the amount by which they are benefiting from the market, as they are paying less than they would be willing to pay. So, the answer to the question is the area VWX represents consumer's surplus.