Consumer Surplus Flashcards
What is consumer surplus?
Economic measure of a customer’s exceeded benefit
Economic measure of a customer’s exceeded benefit
What is consumer surplus?
When does a surplus occur?
Consumer’s willingness to pay for a product is greater than its market price
Consumer’s willingness to pay for a product is greater than its market price
When does a surplus occur?
What should happen in theory if a consumer buys more product?
The less willing they want to pay more for each additional unit due to the diminishing marginal utility derived from the product.
The less willing they want to pay more for each additional unit due to the diminishing marginal utility derived from the product.
What should happen in theory if a consumer buys more product?
What is the equilibrium price?
When demand and supply meet
When demand and supply meet
What is the equilibrium price?
Why is consumer surplus useful?
A good way to measure the value of a product/service
A good way to measure the value of a product/service
Why is consumer surplus useful?
