Every day, consumers make purchasing decisions based on their willingness to pay for goods and services, while businesses determine prices based on how much they can charge while still making a profit. These interactions create consumer and producer surplus, which measure the difference between what consumers are willing to pay and what they actually pay, as well as the additional revenue businesses earn above their minimum acceptable price. This project challenges students to explore how people value everyday products by conducting a survey to analyze the surplus generated in real-world transactions.

Students will create a survey asking respondents how much they are willing to pay for various goods and services, such as a cup of coffee, a streaming service subscription, or a ride on public transport. They will then compare these responses to the actual market prices of these goods. If a person is willing to pay $5 for a coffee but only pays $3, they experience a consumer surplus of $2. Similarly, students can investigate the producer side, researching how much it costs businesses to provide a good and whether they charge significantly more, leading to producer surplus.

A key aspect of this project is understanding why consumer and producer surplus exist and how they can be influenced by external factors such as market competition, demand shifts, and government policies. For example, when new competitors enter a market, prices may drop, increasing consumer surplus but reducing producer surplus. Alternatively, when demand spikes—such as for concert tickets—businesses may increase prices, capturing more producer surplus at the expense of consumers.

The final report will summarize survey findings, economic analysis, and market trends, helping students understand how surplus affects both buyers and sellers. The goal is to connect theory with real-world purchasing behaviors, giving students insight into how businesses set prices and how consumers perceive value in everyday transactions.