Consumers’ Surplus

Consumers’ Surplus - subjective do not add...

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Consumers’ Surplus: Marshall has analyzed consumers’ surplus as a part of demand behavior. Such a surplus of utility that a consumer enjoys is a result of the law of diminishing marginal utility. While utility that a consumer experiences from every additional unit consumed goes on falling, the market price that he has to pay for all the units is uniform. Hence actual money expenditure (which is objective) and the utility received (which is
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Unformatted text preview: subjective) do not add up to the same value. The extra utility that a consumer enjoys is called Consumers’ Surplus . This concept can be described variously. It is the difference in consumer satisfaction arising out of his subjective and objective evaluations. It may also be described as the extra satisfaction that the intra-marginal units bring to a consumer....
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