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Consumer surplus

The amount of money consumers save because the equilibrium price is lower than the maximum price they are prepared to pay for the good or service.

This is always illustrated for any region above the market price and below the demand curve as the diagram below highlights.

It is important to remember that consumer surplus measures the accumulated gain that consumers receive for buying a good at a price lower than their maximum willingness to pay (given by the demand curve) and not the individual gain.

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