Vol: 14, Issue: 2 2024

Page: 45--50

An Analysis of Consumer Surplus as Economic Welfare andProducer Surplus as Social Welfare in Business

Dr. Suhasini Parashar

http://doi.org/10.37648/ijtbm.v14i02.005

Economic welfare is directly or indirectly related with money and wealth, surplus and benefit .Consumer Surplus is the economic/financial measure of a customer’s benefit. A consumer surplus is gain when the consumer’s willingness/interest to pay for a product is greater than its market price. The difference between the price , at which companies are willing to sell the products and the prices that they actually get for the product is the producer surplus. A producer surplus with a consumer surplus equals overall economic surplus or the benefit provided by producers and consumers are interacting in a free market. Welfare economics is the study of aggregate welfare of masses. Economic welfare is the prosperity and standard of living of either an individual or a group of persons. In the field of economics, it specifically refers to utility/satisfaction gained through the achievement of material goods and services. Economic welfare refers to that part of social welfare that can be fulfilled through economic activities production, selling (exchange in market), Marketing and consumption. Welfare economics evaluate the costs and benefits of changes to the economy and helps to formulate public policy for goodness in society, using cost-benefit analysis and social welfare functions with Social Security in economy. The focus in this article is to study theoretical aspects of economic and social welfare with respect to consumer and producer surplus and benefit.