Saturday, September 1, 2018

Consumer's Surplus

Consumer's Surplus : A consumer is generally willing to pay more for a given quantity of good than what he actually pays at the price prevailing in the market.

Example : I go to the shop for purchase of notebook. I' am mentally prepared to pay Rs 50 for the notebook which the seller has shown to me. He offers me the notebook for Rs 35. I immediately purchase the pen and say ' Thank you '.
I were willing to pay Rs 50 for the notebook but i'am delighted to get it for Rs 35 only. Consumer's surplus is the  difference between the maximum amount a consumer is willing to pay for the good in my example the consumer's surplus is ( RS 50-Rs 35)

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