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Benefits

Definition

Benefits refer to positive gains or advantages derived from a particular action, decision, or situation. They can include improvements in well-being, satisfaction, utility, profits, or any other desirable outcome.

Analogy

Imagine you saved up money to buy your favorite video game console. When you finally get it and start playing games with your friends, you experience hours of fun and excitement. All these enjoyable experiences are benefits that come from owning the console.

Related terms

Positive externality: A positive externality occurs when the production or consumption of a good results in benefits for third parties who are not directly involved in the transaction.

Consumer surplus: Consumer surplus represents the difference between what consumers are willing to pay for a product and what they actually pay. It reflects their benefit or gain from purchasing the product at a lower price.

Producer surplus: Producer surplus represents the difference between what producers are willing to sell a product for and what they actually receive. It reflects their benefit or gain from selling the product at a higher price.