Friday, March 10, 2006

Consumer Surplus

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

2 comments:

mrsmichelleadams said...

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

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).