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Surplus, Consumer and Producer

In economics, consumer's surplus refers to the difference between what a buyer actually pays for a product and the maximum that he would have been willing to pay. If one would have been willing to spend $40 on a shirt, but find it on sale for $10, one would realize a consumer surplus of $30 on the purchase. Consumers' surplus is used to refer to the aggregate difference between what consumers would be willing to pay for a given good or service and what they actually do pay (the market price).

Producer's surplus, inversely, is the difference between the price actually received by a seller (or sellers) for a product and the minimum price at which the seller (or sellers) would have been willing to sell. ...

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