At the output level that maximizes total surplus the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output.
A market's total surplus serves as a gauge for the general well-being of all participants. Combined consumer and producer surplus make up this total. Consumer surplus is the difference between what customers are ready to pay and what they actually pay for a product.
The price a seller receives and their willingness to sell each quantity at that price is known as the producer surplus.
At market equilibrium, total surplus is maximized. At equilibrium, the price is the maximum amount which consumer can pay and minimum acceptable amount by the seller.
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