Determining consumer surplus
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The following graph illustrates the market for a breast cancer fighting drug without which breast cancer patients cannot survive. What is the consumer surplus in this market? How is it different from normal markets?
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Solution Summary
The solution discusses the value of consumer surplus in case of given demand and supply scenario. It also discusses how it is different from normal markets.
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Consumer surplus is defined as the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (the market price). The level of ...
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- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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