#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
recognize that the demand curve can thus be considered a marginal value curve because it shows the highest price consumers are willing to pay for each additional unit. In effect, the demand curve is the willingness of consumers to pay for each additional unit.
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3.9. Consumer Surplus—Value minus Expenditurece to consume it.
If demand curves are negatively sloped, it must be because the value of each additional unit of the good falls the more of it they consume. We will explore this concept further later, but for now it is enough to <span>recognize that the demand curve can thus be considered a marginal value curve because it shows the highest price consumers are willing to pay for each additional unit. In effect, the demand curve is the willingness of consumers to pay for each additional unit.
This interpretation of the demand curve allows us to measure the total value of consuming any given quantity of a good: It is the sum of all the marginal values of each uni Summary
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