This document discusses consumer surplus and marketable surplus. It defines consumer surplus as the difference between what buyers are willing to pay for a good and the actual amount paid, representing the benefit buyers receive. Consumer surplus is highest when prices are lowest. Marketable surplus occurs when there is excess supply of a product and represents goods that can still be sold through secondary markets or wholesaling, though managing surplus also involves additional expenses.

1. Division of Agricultural Economics & ABM

3.  The maximum amount that a
buyer will pay for a good.
 It measures how much the
buyer values the good or
service.
 A buyer’s willingness to pay
minus the amount the buyer
actually pays.

4. Buyer Willingness to pay
in($)
Vrish 100
Arsalan 80
Ajay 70
Aijaz 50

5. Price Buyers Quantity
demanded
More than $100 None 0
$80 to $100 Vrish 1
$70 to $80 Vrish, Arsalan 2
$50 to $70 Vrish, Arsalan, Ajay 3
$50 or less Vrish, Arsalan, Ajay, Aijaz 4

6. Price of
product
0 Quantity of products
Demand
1 2 3 4
$100 Vrish’s willingness to pay
80 Arsalan’s willingness to pay
70 Ajay’s willingness to pay
50 Aijaz;s willingness to pay

7. (a) Price = $80
Price of
product
50
70
80
0
$100
Demand
1 2 3 4 Quantity of
product
’Vrish’s consumer surplus ($20)

8. (b) Price = $70
Price of
Product
50
70
80
0
$100
Demand
1 2 3 4
Total
consumer
surplus ($40)
Quantity of
Product
Vrish’s consumer surplus ($30)
Arsalan’s consumer surplus($10)

9.  Consumer surplus, the
amount that buyers are
willing to pay for a good
minus the amount they
actually pay for it,
measures the benefit that
buyers receive from a
good as the buyers
themselves perceive it.

10.  Consumer surplus equals buyers’
willingness to pay for a good
minus the amount they actually
pay for it.
 Consumer surplus measures the
benefit buyers get from
participating in a market.

11.  A marketable surplus can be the
result of an accumulation of unsold
goods or an instance of
overproduction.
 A market surplus occurs when there
is excess supply.

12.  Marketable surplus has lasting value & that can be sold or used
in a way that was not originally intended.
 It has value for someone, somewhere & high quality can help
to maintain its relevancy.

13.  Secondary market
 Wholesale opportunities

14.  You can be left with lots of product
that you cannot move.
 Additional market expenses tend to
be involved as well.