It is FALSE that, the price of a company charges for a good or service is typically more than the utility placed upon that good or service by the customer.
- A consumer surplus occurs when consumers pay less for a good or service than they would be willing to.
- Marginal utility, or the additional satisfaction a consumer receives from purchasing one more unit of a good or service, is the foundation of consumer surplus in economics.
- Consumer surplus always rises when a good's price is on the decline and falls when a good's price is on the rise.
- Economists visualize it as the triangle-shaped region between the market price and what consumers are willing to pay under the demand curve.
- Total economic surplus is equal to consumer surplus plus producer surplus.
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