Consumer surplus, Microeconomics

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Consumer Surplus 

-Difference between maximum amounts a consumer is wishing to pay for a good and amount actually paid.

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The stepladder demand curve is converted into a straight line demand curve by making the units of good smaller.
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Combining consumer surplus with aggregate profits which producers obtain we can evaluate:

  1) Benefits and Costs of different market structures

  2) Public policies which changes the behavior of consumers and firms 


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