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What is Consumer Surplus?
The “Consumer surplus” actually signifies the variation between what price a consumer actually pays for a specific service or goods and what they are willing to pay. In simple terms, it means the amount of gain that customers make from the consumption of services and goods of their choice at a particular cost. It is an economic determinant of customer satisfaction.
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Why is it important?
The concept of consumer surplus is of vital importance in the field of economics, particularly in demand and welfare. This is an essential concept in economics as well as in the formulation of various economic policies like Government taxation and the price policy that is pursued by monopolistic sellers of specific items.
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