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Consumer Surplus
Consumer Surplus
- Price willing to pay: the maximum amount that buyers are willing to pay to buy a
good.
- Consumer surplus: a consumer's willingness to pay for a good minus the amount
he or she actually pays for that good.
The area under the demand curve and above the price level measures consumer
surplus in a market.
Changes in Consumer Surplus
Changes in Consumer Surplus as Price Increases When prices rise, there are two
reasons for the decrease in consumer surplus.
- buyers leave the market
- the remaining buyers have to pay a higher selling price