Willingness to pay — the most a buyer would pay; the demand curve ranks buyers by this value

Consumer surplus (CS) — WTP minus price paid; area under demand and above price

How a lower price raises CS — existing buyers pay less + new buyers enter

Cost & willingness to sell — opportunity cost of the seller; the supply curve ranks sellers by cost

Producer surplus (PS) — price received minus cost; area above supply and below price

Total surplus — CS + PS = value to buyers − cost to sellers

Market efficiency — competitive equilibrium maximises total surplus

Benevolent social planner — would still choose the free-market outcome under standard assumptions

Market failure — when competition or no-externality assumptions fail (power, externalities, information)

Organs case — efficiency (pie size) vs equity/ethics (who gets what)