People have volatile personality. They grab the opportunity when it comes to them. They tend to change from time to time based on their needs,demands and income levels. They choose goods or services which blow up their convenience within there income levels. And according to surplus in consumers and producers we've curves which represents on demand and supply.
Consumer surplus :
It is the difference in the price consumer is willing to pay for a product or service and he actually ends up in paying for a product. Here the consumer prepares to pay some amount but due to less number of producers demand of customer increases and he pays less than what he expected to or vice versa. By this consumers gets benefited as the producers are less and consumers are more.
For example lets say you go for shopping and you find some really pretty branded dress. Based on the brand we already know that it is very expensive, as it is very good you ant to buy even though it is expensive i.e., willingness to pay the price. And suddenly you see that there is a discount of 50% on the dress.
Producer Surplus :
It is the difference between the price which is producer or supplier is willing to sell and the price the product is actually sold at. Here the producers are more and consumers are less and because of this producers get benefited than the customers.
For example lets say air plane fares are more during weekends but higher during holidays and festival seasons.
No comments:
Post a Comment