The concept of consumer surplus has several applications both in economic theory and economic policy. This concept has been used to resolve water-diamond paradox of value theory, to explain the effects of taxes and subsidies on people's welfare, to make cost-benefit analysis of public projects, to show gains from trade etc. We will explain below some of the applications of [...]
In this article we will discuss about the theoretical and practical uses of the concept of consumers surplus. The uses are: 1. Distinction between Value-in-use and Value-in-Exchange 2. Importance in Welfare Economics 3. Comparison of Gains from the International Trade 4. Comparison of Living Conditions 5. Useful to a Monopolist 6. Environmental Benefits to Consumers 7. Practical Importance in Public [...]
In this article we will discuss about the concept of consumer’s surplus. Also learn about the difficulties involved in measuring consumer's surplus. Concept of Consumer’s Surplus: Introduction, consumer's surplus was introduced in economics by Alfred Marshall, although the use of the concept goes back at least to the Freanch economist Dupuit writing in the first half of the nineteenth century. [...]