Section 1
Consumer Surplus
Book
Version 3
By Boundless
By Boundless
Boundless Economics
Economics
by Boundless
3 concepts
Willingness to Pay and the Demand Curve
In general as the price of a good increases, the quantity demanded of that good decreases.
The Demand Curve and Consumer Surplus
Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they do pay.
Impacts of Price Changes on Consumer Surplus
Consumer surplus decreases when price is set above the equilibrium price, but increases to a certain point when price is below the equilibrium price.