Final answer:
Amanda's consumer surplus is the difference between the price she is willing to pay and the market equilibrium price. This surplus represents the benefit obtained from paying less than the maximum willingness to pay. It is maximized at market equilibrium but can change and cause deadweight loss with price controls.
Step-by-step explanation:
Amanda's consumer surplus is the difference between the price that consumers are willing to pay and the market equilibrium price. Consumer surplus represents the benefit consumers receive when they pay less for a product than the maximum amount that they are willing to pay. It is graphically depicted as the area above the market price and below the demand curve.
The concept of consumer surplus is central to understanding market efficiency and consumer behavior. When the market is at equilibrium, the total surplus, consisting of both consumer and producer surplus, is maximized, suggesting that the allocation of resources is efficient. In case of price controls like price ceilings or price floors, consumer surplus can change, potentially creating a deadweight loss to the economy, which occurs when the economy produces at an inefficient quantity