Difference between revisions of "Calculate Consumer Surplus"
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Consumer surplus is a term used by economists to describe the difference between the amount of money consumers are willing to pay for a good or service and its actual market price.<ref name="rf1">http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/marginal-benefit-cost.asp</ref> Specifically, a consumer surplus occurs when consumers are willing to pay ''more'' for a good or service than they currently pay. Though it sounds like a tricky calculation, calculating consumer surplus is actually a fairly easy equation once you know what to plug into it. | Consumer surplus is a term used by economists to describe the difference between the amount of money consumers are willing to pay for a good or service and its actual market price.<ref name="rf1">http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/marginal-benefit-cost.asp</ref> Specifically, a consumer surplus occurs when consumers are willing to pay ''more'' for a good or service than they currently pay. Though it sounds like a tricky calculation, calculating consumer surplus is actually a fairly easy equation once you know what to plug into it. | ||
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== Steps == | == Steps == | ||
=== Defining Key Concepts and Terms === | === Defining Key Concepts and Terms === | ||
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*This number corresponds to the total consumer surplus because the consumer surplus for one individual consumer is simply the consumer’s marginal benefit or the difference between what he or she would have paid versus the amount actually paid. | *This number corresponds to the total consumer surplus because the consumer surplus for one individual consumer is simply the consumer’s marginal benefit or the difference between what he or she would have paid versus the amount actually paid. | ||
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== Sources and Citations == | == Sources and Citations == | ||
