Economics · Consumer Surplus and Regulatory Applications
Consider the following statements regarding the theoretical foundations and regulatory applications of the consumer surplus measurement framework: A. The measurement framework for consumer surplus, which was originally developed by Jules Dupuit in 1844 and later systematized by Alfred Marshall, calculates the net benefit as the integral of the demand curve minus the total expenditure (P* × Q*). B. In the Indian regulatory framework, the National Pharmaceutical Pricing Authority (NPPA) uses price ceilings on essential drugs, a mechanism that increases consumer surplus by lowering the price paid by consumers below the market equilibrium. Which of the above statements is/are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and B✓
- 2Neither A nor B
- 3B only
- 4A only
Correct answer
Both A and B
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