In the field of economics, what is consumer surplus?
Consumer Surplus is the difference between what a customer paid, and what a customer was willing to pay for a particular good or service.
- I was willing to pay $6.00 for a coffee on vacation. When I finally bought a coffee, it was only $4.00. Consumer surplus = $2.00.
- I was also willing to pay $150,00 for my house. I only paid $145,000. Consumer surplus = $5,000.