Introduction to Consumer Surplus

By Jodi Beggs, About.com Guide

As long as there is no price discrimination present, a good or service is sold to all consumers at the same price, and this price is determined by the equilibrium of supply and demand. Because some customers value goods more than others (and hence have higher willingness to pay), most consumers don't end up getting charged their full willingness to pay.

The difference between consumers' willingness to pay and the price that they actually pay is referred to as consumer surplus, since it represents the "extra" benefits that consumers get from an item in excess of the price that they pay to get the item.

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• What Is Consumer Surplus?
• Willingness To Pay Versus Price
• Consumer Surplus and the Demand Curve

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