Consumer surplus is the difference between the price which consumer willing to pay and actually pays for a good
Example:
There are three consumers gopal,amith and Vijay. They wanted to buy a secondhand car. They went for an auction and their individual budget as followes.
Gopal-Rs.150000/-
Amith-Rs.160000/-
Vijay-Rs. 175000/-
These are the amount which they are willing to pay. The auction started from Rs80000/- when it crossed Rs.165000/-gopal and amith have dropped out of auction.Because they are unwilling to pay that amount. At this point Vijay has opted the car .Rs.100000/- is benfit for amith while participating in auction. Because he is willing to pay Rs.175000/- but he actually pays Rs.165000/-
From this examples we can say that consumer surplus measures the benefits of buyers while participating in market.
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