#consumer surplus

[verisci]

Unlocking the Secrets of Price Discrimination: How Businesses Maximize Profits

Price discrimination is a sophisticated and strategic approach businesses use to maximize profits. By understanding and applying different pricing strategies to various segments of customers, businesses can extract the highest possible revenue from each group. In this article, we will explore the concept of price discrimination, its types, benefits, and examples, and how businesses can…

Unlocking the Secrets of Price Discrimination: How Businesses Maximize Profits

[mandrocles]

Consumer surplus, opportunity costs

There is a concept in political economy that even neoliberal Economists acknowledge which is that of "consumer surplus", which is the difference between the highest price that a consumer would pay for a commodity, and the prices actually paid. The highest price that a consumer would pay for a commodity is in effect its value to the consumer, expressed in money.

Neoliberal Economists are very fond of using consumer surplus arguments when claiming that technology is substantially improving the living standards of consumers, for example that "free" internet services are worth £19,560 per year to consumers.

But it is not a popular topic otherwise because the claim by Karl Marx that employees are exploited is that employers enjoy consumer surplus from their work. Consumer surplus is a good topic when the consumers are the employees, but not a good topic when the consumers are the employers.

However consumer surplus is very important to understand how the modern political economies have evolved and what drives the living standards in them:

Currently in modern economies agriculture accounts for a couple percent of GDP and manufacturing a couple dozen percent of GDP, yet they comprise the largest part of the living standards of the people.

Agriculture developed in such a way to generate a massive consumer surplus, as intensive cultivation developed thanks to better practices, use of fertilizers, and use of machinery, as prices of food fell way below the maximum prices consumers would have paid and did pay in earlier times.

Industry (including manufacturing and transportation) developed in such a way to generate a massive consumer surplus, as standardized production with machines became common, and actual prices of products fell way below the maximum prices consumers would have paid and did pay in earlier times.

In both the cases of agriculture and industry the enormous consumer surplus was the result of much cheaper fuels, coal and oil/gas: the prices paid by consumers for both are way, way lower than the maximum price consumers would pay for the amount and density of the energy they contain.

Note: The huge consumer surplus of agriculture allows a large number of workers to do manufacturing, and the even bigger consumer surplus of manufacturing allows most workers to do services, which don't have a huge consumer surplus, as they mostly performed by humans powered by farmed food and not by machines powered by mineral fuels.

The replacement of food-powered humans and animals with fuels-powered machines was the essence of the industrial revolution.

The enormous consumer surplus of mineral fuels is easy to miss because not only consumer surplus is somewhat politically dangerous as a concept because it is part of the theory of exploitation of Karl Marx, but also because unlike observed prices and quantities, it is a notional quantity, being the difference between notional maximum price and the observed price.

There is something similar in political economy studies, and it is "opportunity cost", that is the difference between the actual advantage of doing something and the potential advantage of doing something more valuable.

Opportunity costs can be temporal, if the potentially more advantageous action is for the same thing but at a different time, or spatial, if it is for a different thing at the same time.

Usually the notion of opportunity cost is applied to investment rather than consumption: for example a temporal case is investing some funds now in an activity rather than later at a potentially more profitable time. Opportunity costs are as a rule notional too, because it if the difference between an actual advantage and a notional one.

In a sense it is as to revenues the complement to consumer surplus as to costs. There is a considerable amount of opportunity costs, both temporal and spatial as to mineral fuels, which as a rule are limited in quantity: how fast to deplete them (temporal) and whether to use them for generating motive power, generating heat, or as chemical feedstock. These opportunity costs can also be very large, even if perhaps not as large as the consumer surplus of mineral fuels, and perhaps in the future there will be a lot of regreat that the rate of consumption of mineral fuels has been too high so far, or that too much of them have been burned up just to generate heat, or for transportation.

Opportunity costs and consumer surplus are very important for understanding the actual evolution of political economies and for policy making.

Note: both are notional quantities and similar in that the physics concept of "potential energy", that however is a simplifying and somewhat misleading concept.

[magiccrossangel]

Consumer Surplus Is Narrowing

Dear Singapore Government,

1. People and companies are striving to make more money.

2. Sales are declining. People do not have enough money to spend.

3. To make up for lost profits, companies raise the prices of goods.

4. Consumer surplus narrows. The consumer dollar does not stretch as far as before. It becomes harder for families to make ends meet.

I notice prices edging upwards, Government. Gone are the days of the $2.50 plate of chicken rice. Now it’s $3.50 to $5.50 per plate. McDonalds is introducing all kinds of premium burgers, increasing profits by premium product line extension.

I just ate a New Year’s Dinner at Crystal Jade Restaurant yesterday night. Just me and my wife — $140. At the doorway menu, you can only see $8.80 to $12.90 meals on their menu. But once you step in, sit down and order… it is $16, $20, $28, $45 and more. Too embarrassed to step out. Want to show we can afford it. We ate six items. Bust!

Why did Crystal Jade ‘Bait & Switch’ us? Not enough customers. Need to have high prices to make up for lost profits.

Many companies are raising prices in a down economy. People are getting less pay, prices of goods are going up to cover a lack of sales; this means you are having less money and have to pay higher prices — harder to make ends meet. Consumer surplus is narrowing.

What To Do?

Government, two ways to tackle this:

One, Print Statutory Money to increase salaries and make direct deposits into peoples’ bank accounts. The people will feel relief.

Two, Price Controls upon the prices of goods, food, and services islandwide. Hold prices down. Bring back the $2.50 chicken rice! Pay Singapore businesses to hold their prices down.

This can really work. Consumer surplus will increase. It will feel like there is more than enough money to cover expenses. People will be happy and provided for. Companies will sigh relief as their relief funds come in. Hot dogs will be $1 again. Ice cream will be $0.50 again. Even kids can afford that. Price controls.

Use this idea, Singapore Government. Narrow the surplus gap by raising income and pressing prices down. Use your magic money! Hit the right target with your dollars, okay? Raise income, press down prices. Good luck!

Sincerely, Halabuth Angel Reader Magic Cross www.magiccross.sg

Angel Readings · Spiritual Counselling · Energy Healing

[furryalligator]

50 Things That Made the Modern Economy: Bonsack machine https://www.bbc.co.uk/programmes/w3csz2wz

Read more: What Is Consumer Surplus?

Consumer surplus is an economic measurement of consumer benefits. Consumer surplus happens when the price that consumers pay for a product or service is less than the price they're willing to pay. It's a measure of the additional benefit that consumers receive because they're paying less for something than what they were willing to pay.

A consumer surplus occurs when the consumer is willing to pay more for a given product than the current market price.

Consumer Surplus

Many producers are influenced by consumer surplus when they set their prices.

The Basics of a Consumer Surplus

The concept of consumer surplus was developed in 1844 to measure the social benefits of public goods such as national highways, canals, and bridges. It has been an important tool in the field of welfare economics and the formulation of tax policies by governments.

Consumer surplus is based on the economic theory of marginal utility, which is the additional satisfaction a consumer gains from one more unit of a good or service. The utility a good or service provides varies from individual to individual based on their personal preference. Typically, the more of a good or service that consumers have, the less they're willing to spend for more of it, due to the diminishing marginal utility or additional benefit they receive.

Economic welfare is also called community surplus, or the total of consumer and producer surplus.

[darsotadrees]

Economics MCQs (English) 136 to 140 (Consumer Behavior & Cost of Production)

[HDquiz quiz = “206”]

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[99set]

Consumer Surplus

The difference between the maximum price that consumers are willing to pay for a good and the market price that they actually pay for a good is referred to as the consumer surplus. The determination of consumer surplus is illustrated in Figure , which depicts the market demand curve for some good.   The market price is $5, and the equilibrium quantity demanded is 5 units of the good. The market…

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[furryalligator]

[z-bra]

The capitalist world-economy takes the form of an iceberg. The most studied part which appears above the surface is supported by a huge underlying structure that is out of sight. Unlike the iceberg, the world-economy is a dynamic system based on flows of value from the underside toward the top. These include drains of surplus (expropriated value) that take two forms: visible monetarized flows of bright value and hidden un(der)costed flows that carry dark value (the unrecorded value of cheap labor, labor reproduction and ecological externalities). Commodity chains are central mechanisms for these surplus drains in the world-economy. At each node of the chain, participants attempt to maximize their capture of bright value through wages, rent and profit. They do this by constructing differential degrees of monopoly (control of the markup between cost and sale price) and degrees of monopsony (control of markdowns of production costs). However, this process depends upon the transformation of dark value into bright value for capture. Via an examination of the Apple iPad commodity chain, I show how the bright value captured by Apple depends on the dark value extracted by its suppliers. Dark value is estimated by measurements of the value of under-payments for wage labor, reproductive labor and environmental damage in Asian countries, especially China. Surprisingly, most dark value embedded in the iPad is captured by final buyers (mostly in the core) as consumer surplus.