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Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually do pay.

Business Glossary provided by
Consumer surplus is a measure of the additional benefit that consumers receive because they pay less for something than what they were willing to pay. It occurs when the consumer is willing to pay more for a given product than the current market price. It represents a measure of the economic welfare that people gain from consuming goods and services and can be seen graphically as the area under the demand curve and above the price level.
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