The paper attempts to rectify what appear to be popular but elementary misconceptions about
the concept of consumer surplus in the context of Marshallian demand curves. It is primarily
addressed to teachers of microeconomics at the undergraduate level or in MBA programs of
business schools. The main text informs the reader about the model/context and the results
we are concerned with, all of the latter being a comprehensive teaching note, relegated to an
appendix of the paper. Thus, the potential instructor may use the main text to motivate himself/
herself and at the same time inform his/her students as to the topic i.e. the rehabilitation of
consumer surplus as an exact measure of welfare from the stand-point of cost benefit analysis. Thereafter the appendix can be referred to for a more formal presentation. The technical results contained in the appendix begin by showing that willingness to pay is the area under the
demand curve if and only if consumers are surplus maximizers. The last result in the appendix
is a theoretically ‘happy ending’ since it shows that for purposes of applied economics, budget
constrained preference maximization implies surplus maximization and hence for such consumers, willingness to pay is indeed the area under the demand curve up to the quantity consumed.
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