The formula consumer surplus uses a consumers "willingness to pay" as part of the equation. Economists uses "willingness to pay" as a stand in for the numerical value of the benefit a consumer receives from purchasing something. If a consumer's "willingness to pay" for a sandwich is $10, what does that mean? Why do economists say that the benefit of that sandwich (to that consumer) is $10?

The formula consumer surplus uses a consumers "willingness to pay" as part of the equation. Economists uses "willingness to pay" as a stand in for the numerical value of the benefit a consumer receives from purchasing something. If a consumer's "willingness to pay" for a sandwich is $10, what does that mean? Why do economists say that the benefit of that sandwich (to that consumer) is $10?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 15PAE

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