How is consumer surplus calculated?

Consumer surplus is a key concept in microeconomics that measures the difference between what consumers are willing to pay for a good or service and what they actually pay. It is calculated by taking the maximum price that a consumer is willing to pay and subtracting the actual payment they make for that good or service.

This calculation highlights the benefit that consumers receive when they purchase a product for less than the highest price they were prepared to pay. For example, if a consumer is willing to pay $50 for a concert ticket but only pays $30, the consumer surplus is $20, indicating the additional value gained from the purchase.

The other options relate to different economic concepts, such as producer surplus, total revenue, and price equilibrium, but do not address the measurement of consumer surplus directly. Understanding the calculation of consumer surplus is essential for analyzing consumer behavior and market efficiency in microeconomics.