If a consumer is willing and able to pay $35 for a particular good but only has to pay $24, what...
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If a consumer is willing and able to pay $35 for a particular good but only has to pay $24, what is the consumer surplus?
Consumer Surplus
The consumer surplus refers to the benefit or utility enjoyed by the consumers when the purchase a good whose price is below their maximum willingness to pay.
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We calculate the consumer surplus as:
{eq}\text{ Consumer surplus}=\text{ Willingness to pay - Market price} {/eq}
Hence, if a consumer is...
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Consumer Surplus: Definition, Formula & Examples
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Chapter 7 / Lesson 6
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Learn the consumer surplus definition and see how it is determined by the people purchasing the product. Study consumer surplus examples using its formula.
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