Friday, March 10, 2006

Consumer Surplus

If you were to consume 5 hamburgers at Wendy's, would you enjoy a consumer surplus?

4 comments:

schmid said...

Consumer surplus is the amount of money you are willing to pay. Therefore it could be since you are willing to pay for five. But it may be a stretch. It depends on other things.

theczyzewicz said...

for me, personally, no i would not enjoy a consumer surplus...because i'd only want to eat one.

Reid said...

At first, yes, but as the hamburgers keep coming I think that the my consumer surplus enjoyment will decrease.

KM said...

Okay, I didn't take into account that you wouldn't want 5. :)

But...If you are willing to pay for 5, then you would have consumer surplus - because if you didn't, you wouldn't buy them. Does that make sense?

Reid has it - the CS would decrease as you have more (as you get closer to equilibrium).

It's that whole thing with the pizza that I used in class - the diminishing marginal utility. That first piece of pizza might taste really good (high CS) but as you get to that 16th pizza, it's just not going to taste as good (lower CS).