Consumer surplus is best defined as the difference between how much consumers are willing and able to pay for a good and how much they actually pay.
1. It represents the additional benefit or value that consumers receive when they are able to purchase a good at a price lower than what they were willing to pay.
2. For example, if a consumer is willing to pay [tex]$50 for a pair of shoes but only has to pay $[/tex]30 to purchase them, the consumer surplus would be [tex]$20 ($[/tex]50 - $30).
3. Consumer surplus is important because it reflects consumer satisfaction and welfare by capturing the difference between the maximum price a consumer is willing to pay and the price they actually pay for a product or service.
In summary, consumer surplus is a measure of the economic benefit that consumers gain from being able to purchase goods or services at a price lower than what they are willing to pay.
