EconomicsNEB 2075 (old course)
What is consumer's surplus? [2]
2Answer
Consumer’s surplus refers to the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay in the market. It represents the extra benefit or satisfaction a consumer gains from purchasing a product at a lower price than they were prepared to pay.
Graphically, consumer’s surplus is the area between the demand curve and the equilibrium price line, up to the quantity demanded. For example, if a consumer is willing to pay ₹100 for a product but buys it at ₹60, their consumer’s surplus is ₹40. This concept helps measure the economic welfare of consumers in a market.
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