CAS EC 101 Lecture Notes - Lecture 5: Kenmore Square, Economic Surplus, Social Capital
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CAS EC 101 Full Course Notes
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Willingness to pay is the maximum that a consumer is willing to pay for a good or service. You are walking along on kenmore square just before the first presidential. In the window of the bu bookstore you see a donald trump mask. The mask is really scary, even scarier than donald himself. You think i really want that mask. You think i"m willing to pay up to for that mask . Then you find out the price tag says the price is . You"re gonna rush in and buy it. Wtp is the maximum you would pay. If wtp = , you would not be willing to pay . Of course you are willing to pay . Consumer surplus is the monetary value of the benefit remaining to the consumer after the price is paid (cs= wtp-price) Consumer surplus of a voluntary purchase will not be negative.
