What does consumer surplus represent?

Consumer surplus is defined as the difference between the maximum price consumers are willing to pay for a good or service and the actual price they pay. This economic concept illustrates the benefit that consumers receive when they purchase a product at a lower price than they would have been willing to pay. Essentially, consumer surplus measures the extra utility or satisfaction consumers derive from buying a product for less than their perceived value of that product. It's an important indicator of consumer welfare in a market economy, as it reflects the value consumers receive from transactions.

The choices that do not capture this concept focus on different economic elements. For instance, total revenue generated by sales relates to overall business performance rather than individual consumer benefit. The number of products available pertains to supply and market structure, and the increase in production costs over time is associated with supply-side factors, without addressing consumer welfare directly.