Consumer surplus

News


Gender pay gap

80% of UK companies and public sectors organisations pay women less than men.

Read more

What is consumer surplus?

Consumer surplus is the extra benefit a consumer gains when the price they actually pay in the market is less than they would be prepared to pay. It ca be shown graphically as the area from the 'price line' up to the demand curve.

Consumer surplus

For example, if a consumer would be prepared to pay £100 for a tennis racket, and the market price is £75, their consumer surplus is £25. Different consumers will have different expecations of what they are prepared to pay, depending on their tastes and preferences, their needs, and their budget. The idea of 'surplus' is central to an understanding of the traditional model how markets work.

The phrase was first used by 19th century French engineer and economist Arsène Dupuit, and later developed by English economist Alfred Marshall.




WTO rules

What exactly is the 'most favoured nation' rule?

Read more
Read more
Model agencies collude to fix rates

Regulators find leading model agencies guilty of price fixing.

Read more
Read more
Read more
Read more
Customs unions

Costs and benefits of customs unions.

Read more
New materials

Multiple choice papers for Paper Three.

Read more
Savings ratio

Savings ratio falls to lowest level on record.

Read more