Consumer Surplus

This video link takes you to a short, clear review of the concept of consumer surplus. You can also go to the CFI website on Consumer Surplus to see a longer discussion including producer surplus as well. 

Willingness to Pay

The video linked below provides a nice explanation on what we mean by willingness to pay. This tends to be a fairly simple concept to understand but can be a very difficult idea to put into practice. Consider how difficult it is to ask someone how much they are willing to pay for a good. Are they answering honestly? Are they deceiving you intentionally, or are they accustomed to anchoring their thoughts on price to what they expect to pay rather than what they are willing to pay. 

 gives a standard economic explanation
 focuses on a marketing approach to collect information from customers.


Last modified: Sunday, 5 July 2020, 4:02 AM