Consumer Surplus- When a consumer has a definite price in his mind,but when he buys the product he actually buys it less than what he expected is known as consumer surplus.
Producer Surplus- When a producer wants to sell a product on a certain price but due to market demand the consumer is willing to buy the product on a higher price,this difference of the customer willing to buy the product and the amount in which the producer wanted to sell is known as producer surplus.
For example:Suppose Shyam went to buy a product to a certain producer,and the producer asks for a price of Rs.10000,but after bargaining he gets ready to sell the product for a amount of Rs.7000. So,here the consumer gets an amount of Rs.3000 as consumer surplus. And the price which the producer made the product or expecting at least Rs.5000 for the product but he actually got an amount of Rs.7000. This difference of Rs.2000 is the producers surplus.
Producer Surplus- When a producer wants to sell a product on a certain price but due to market demand the consumer is willing to buy the product on a higher price,this difference of the customer willing to buy the product and the amount in which the producer wanted to sell is known as producer surplus.
For example:Suppose Shyam went to buy a product to a certain producer,and the producer asks for a price of Rs.10000,but after bargaining he gets ready to sell the product for a amount of Rs.7000. So,here the consumer gets an amount of Rs.3000 as consumer surplus. And the price which the producer made the product or expecting at least Rs.5000 for the product but he actually got an amount of Rs.7000. This difference of Rs.2000 is the producers surplus.
No comments:
Post a Comment