Consumer surplus
It is defined as difference of total amount and the amount that consumer is willing and able to pay for goods.
Example if three different tshirts offered for sale at 500 rupees per tshirt.there are 3 people in the shop.A1,B2,and C3
A1 is willing to pay 800 rupees.
B2 is willing to pay 700 rupees.
C3 is willing to pay 500 rupees.
Therefore,A1's consumer surplus is 300 rupees.B2's consumer surplus is 200 rupees.C3 is a marginal buyer.
Economics when applied to real life sounds beautiful. this blog is for those students who are discovering the different facets of economics applications and want to share their discoveries.
Saturday, July 28, 2018
Consumer surplus
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