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Consumer Surplus

A measure of the welfare that people gain from consuming goods and services, or a measure of the benefits they derive from the exchange of goods. Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total they pay (the market price).

Consumer surplus refers to the difference between the maximum price a consumer is willing to pay for a product or service and the actual price they pay for it. In other words, it's the additional satisfaction or utility that a consumer gets from a product or service, above and beyond what they are willing to pay for it. This concept is important in microeconomics because it helps to measure the overall welfare of consumers. The more consumer surplus there is, the better off consumers are, because they are getting more value from the products and services they purchase than they are paying for. In contrast, when consumer surplus is low, consumers are not getting as much value for their money.

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