Explain the working of the consumer’s surplus.

What will be an ideal response?

It is the amount of money a consumer would be willing to pay for a given product, minus the amount he or she must actually pay. Units of a product are not priced marginally but sold at an average price, which means the increased production will give consumers surplus value. Thus, any investment that reduces the cost of the product or service produces a benefit in savings that increases the consumer surplus.