Section 1
Consumer Surplus
Book
Version 3
By Boundless
By Boundless
Boundless Economics
Economics
by Boundless
3 concepts
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Willingness to Pay and the Demand Curve
In general as the price of a good increases, the quantity demanded of that good decreases.
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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.
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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.