Professional Documents
Culture Documents
GRP 6
GRP 6
CONSUMER
Who is consumer? A consumer is one who
demands good and services.
Consumer goods.
∆𝑇𝑈
𝑀𝑈 =
∆𝑄
--
Where:
TU2 = THE NEW TOTAL UTILITY
TU1 = THE ORIGINAL UTILITY
Q2 = THE NEW QUANTITY CONSUMED
Q1 = THE ORIGINAL QUANTITY CONSUMED
Applying formula in table 4.2
170 −90
MU =
3 −2
MU= 80
Graphical illustration of Total
Utility and Marginal Utility
Figure 4.1: Total Utility Curve
TU TU
11
10
5 Q
1 2 3 4 5
Figure 4.2: Marginal Utility Curve
MU
MU
Q
Consumer Surplus
Is a measure of the welfare we
gain from the consumption of
goods and services, or a measure
of the benefits that we derive
from the exchange of goods.
Table 4.3
Consumer Surplus
P
Willing to pay for
the pants
2,500 --------------------------------
Actual Price