Consumer's surplus


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1.(Polit. econ.) The excess that a purchaser would be willing to pay for a commodity over that he does pay, rather than go without the commodity; - called also consumer's rent.
The price which a person pays for a thing can never exceed, and seldom comes up to, that which he would be willing to pay rather than go without it. . . . The excess of the price which he would be willing to pay rather than go without it, over that which he actually does pay, is the economic measure of this surplus satisfaction. It has some analogies to a rent; but is perhaps best called simply consumer's surplus.
- Alfred Marshall.
Webster's Revised Unabridged Dictionary, published 1913 by G. & C. Merriam Co.
References in periodicals archive ?
The difference between the WTP and the actual price is the "consumer's surplus".
Mishan wrote, "The consumer's surplus is the most crucial concept in the measurement of social benefits in any social cost-benefit calculation." The normative significance of consumer surplus comes from it being entirely based on individual preferences--that is, on each individual evaluating what is good or bad for himself.
See Robert Willig, Consumer's Surplus Without Apology: Reply," 69 Am.
Bailey's consumer's surplus formulae are derived and used to compute the welfare cost of inflation for both semi-log and log-log money demand functions.
Willig's famous article, "Consumer's Surplus Without Apology" (Willig 1976), which defends the use of Marshallian surplus as a value measure of market welfare.
It can be argued that besides any subjective dimension the individual must pay from the same amount c, and then the opportunity cost exists no matter how large or small is the consumer's surplus. Once more we must say that the formal relation (3) is not enough in order to understand the context.
(1976): "Consumer's Surplus Without Apology", in American Economic Review, Volume 66 (no.
consumer surplus range from which any given consumer's surplus
By considering the comparison of consumer's surplus and firm's profit, we derive the interesting result that both consumers and the firm will prefer discriminatory pricing if the consumers prefer to consume more differentiated varieties.
"Consumer's Surplus Without Apology." American Economic Review 66 (Sept.): 589-97.
At this critical value of c, the case 3 region consists of the two points ([k.sub.1], [k.sub.2]) = (.432, 2.315) and ([k.sub.1], [k.sub.2]) = (2.315, .432).(16) With these demand parameter values, the consumer's surplus at [p.sup.*] = 0 for the two consumers are equal.
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