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Submitted 239 days ago...

Ineptly185

Ineptly185

New User (2)

Microeconomics

Describe the concept of consumer surplus.

 
 
 
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Answer 1 / 2

Submitted 237 days ago...

mahalo

mahalo

Professor (1,186)

To put it simply, a consumer surplus which is also known as a social surplus is the difference in cost between what the consumer pays and the price he would be WILLING to pay to not be without it. The satisfaction that a customer gets from what they purchased is greater than that derived from the products and resources in making the purchase.

So in short, the consumer has a surplus in satisfaction in excess of the price of the good.

 

Answer 2 / 2

Submitted 237 days ago...

browndog

browndog

Contributor (104)

Yes, and when consumer surplus gets too high, sellers recognize it and raise prices.

 
 

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