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 their reservation price (the highest price they would accept).
Graphically, it is the area between the demand curve and the equilibrium price line, up to the quantity purchased. For example, if a consumer is willing to pay ₹100 for a product but buys it for ₹60, their surplus is ₹40. This concept helps measure consumer welfare and market efficiency.
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