Question

Explain the concept of consumer's surplus with the help of marginal utility analysis ? What
are the difficulties in this measurement

Answer 1

Answer:

If a consumer buys all the units (OR) at RS price per unit, he gets a total satisfaction equal to the area DORS. ... So, consumer's surplus is measured by the area under the demand curve but above the market price. A difficulty is that as the price falls the demand where, the real income of the consumer increases.