Consumer’s surplus:

The concept of consumer’s excess was first introduced by J.A.Dupuit, a French engineer – economist in the year1844. Marshall builds up the concept in his work ‘Principles of Economics’ (in 1890).

Consumer’s excess is experienced in commodities that are highly helpful however relatively cheap. For illustration, newspaper, match box, salt, postage stamp and so on. For such commodities, we are ready to pay more than what we really pay, when the alternative is to go without them. The additional satisfaction a consumer derives is termed as consumer’s surplus.

Let assume a consumer who wants to buy a shirt. He is willing to pay $ 250 for it. However the real price is only $ 200. Therefore he enjoys an excess of $ 50. This is termed as consumer’s surplus.

Definition:

Marshall states Consumer’s surplus as follows:

“The surplus of price that a person would be willing to pay instead than go without the thing, over that which he really does pay, is the economic measure of this excess of satisfaction. It may be termed as consumer’s surplus.”

Assumptions:

1. Cardinal utility, which is, the utility of a commodity is considered in money terms.

2. Marshall supposes that there is definite correlation among expected satisfaction (i.e., utility) and realized satisfaction (i.e., actual).

3. Marginal utility of money is steady.

4. Absence of differences in tastes, income, fashion and so on.

5. Independent utilities and independent goods.

6. Demand for a commodity, based on its price alone; it eliminates other determinants of demand.

Latest technology based Economics Online Tutoring Assistance

Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Theory of Consumer Behavior help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Theory of Consumer Behavior, project ideas and tutorials. We provide email based Theory of Consumer Behavior help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Theory of Consumer Behavior. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Economics Homework help and assignment help services. They use their experience, as they have solved thousands of Economics assignments, which may help you to solve your complex issues of Theory of Consumer Behavior. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.