How is consumer surplus calculated?

Consumer surplus is calculated using the formula for the area of a triangle, which is represented mathematically as (Base*Height)/2. In the context of microeconomics, consumer surplus represents the difference between what consumers are willing to pay for a good or service versus what they actually pay.

The "base" refers to the quantity of the good or service, while the "height" corresponds to the difference between the maximum price consumers are willing to pay and the market price they actually pay. When you think of the demand curve on a graph, the triangle formed between the demand curve and the price line (up to the quantity bought) visually illustrates this surplus. By calculating the area of this triangle, you determine the consumer surplus, providing a clear measure of consumer benefits in economic exchanges.

Other formulas provided do not accurately capture the concept of consumer surplus, as they either represent entire areas (like option B) or misrepresent dimensions (as seen in options C and D). Therefore, the triangular area formula is the most appropriate for calculating consumer surplus.