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9-20 lecture notes

9-20 lecture notes - Consumer surplus • Defined as the...

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Consumer surplus Defined as the difference between the price I was willing to pay and the price I actually paid Law of diminishing marginal utility states that as you get more and more of the same thing at the same time the additional units of the product become less and less valuable than the previous units Vertical distance between what was paid and what consumer was willing to pay is the consumer surplus Arguments about consumer surplus per unit can be translated into fractions of units, therefore, all area under the demand curve measures the total consumer
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