Economic surplus is the total net benefit or value gained by consumers and producers in a market transaction. It is the difference between the maximum price consumers are willing to pay and the minimum price producers are willing to accept.
Imagine you find a rare limited edition sneaker that you've been wanting for a long time, and it's on sale for half its original price. The economic surplus would be the satisfaction you feel from getting such a great deal compared to what you were willing to pay.
Consumer Surplus: Consumer surplus refers to the difference between what consumers are willing to pay for a good or service and what they actually have to pay.
Producer Surplus: Producer surplus represents the difference between the price at which producers are willing to sell a good or service and the actual price they receive.
Total Surplus: Total surplus is the sum of consumer surplus and producer surplus, representing the overall net benefit derived from an economic transaction.
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