Measuring Consumer Surplus with the demand curve The market demand curve depicts the various quantities that buyers would be willing and able to purchase at different rices willingness to pay, we can also use i to g- Because the demand curve reflects buye measure consumer surplus o The area below the demand curve and above the price measures the consumer surplus in the market
• The market demand curve depicts the various quantities that buyers would be willing and able to purchase at different prices. • Because the demand curve reflects buyers’ willingness to pay, we can also use it to measure consumer surplus. • The area below the demand curve and above the price measures the consumer surplus in the market. Measuring Consumer Surplus with the Demand Curve
How the price affects Consumer Surplus ●● Price nita consumer Consumer surplus C surplus to new consumers Additional consumer surplus to Demand initial consumers Q1 Q2 Quantity
Q2 P2 How the Price Affects Consumer Surplus... Quantity Price 0 Demand Initial consumer surplus Additional consumer surplus to initial consumers Consumer surplus to new consumers Q1 P1 D E F B C A
Consumer Surplus and Economic Well-Being o Consumer surplus, the amount that buyers are willing to pay for a good minus the amount they actually pay for it, measures the benefit that buyers receive from a good as the buyers themselves erceive it
Consumer Surplus and Economic Well-Being • Consumer surplus, the amount that buyers are willing to pay for a good minus the amount they actually pay for it, measures the benefit that buyers receive from a good as the buyers themselves perceive it