ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Consumer surplus is the difference between willingness to pay for a good and the price that consumers actually pay for it. Each price along a demand curve also represents a consumer’s marginal benefit of each unit of consumption.

Detailed explanation-2: -Consumer surplus is the difference between the highest price a consumer is willing to pay and the actual price they do pay for the good, or the market price.

Detailed explanation-3: -The difference between the maximum price that consumers are willing to pay for a good and the market price that they actually pay for a good is referred to as the consumer surplus. The determination of consumer surplus is illustrated in Figure, which depicts the market demand curve for some good.

Detailed explanation-4: -According to Paul Samuelson, consumer’s surplus is nothing but the excess of the individual demand price over the market price of a commodity (or, the positive difference between the potential price and the actual price of a commodity).

Detailed explanation-5: -Willingness to pay, sometimes abbreviated as WTP, is the maximum price a customer is willing to pay for a product or service. It’s typically represented by a dollar figure or, in some cases, a price range.