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Consumer Surplus
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Graphically, this measure translates into the area under the consumer’s demand curve, up to and including the last unit consumed
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3.9. Consumer Surplus—Value minus Expenditure
onal 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 unit consumed, up to and including the last unit. <span>Graphically, this measure translates into the area under the consumer’s demand curve, up to and including the last unit consumed, as shown in Exhibit 12, in which the consumer is choosing to buy Q 1 units of the good at a price of P 1 . The marginal value of the Qth1 unit is clearly P 1 , because that is the h


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