When a buyer experiences consumer surplus, the seller experiences a loss.

Question

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Consumer surplus occurs when a buyer is willing to pay more for a product than what they actually pay. In this case, the buyer feels like they are getting a good deal and experiences a surplus. The seller, on the other hand, is still receiving the full price of the product and does not experience a loss. In fact, the seller may also benefit from the trade by receiving producer surplus, which is the difference between the market price and the cost of producing the product.

When a Buyer Experiences Consumer Surplus, the Seller Experiences a Loss