It is now time to go “behind the scenes” of demand curves to understand
why they are downward sloping. So far, we have studied the demand-
and-supply model and used it to analyze market outcomes, but we have
not explained the consumer behaviour that underlies the demand curve
itself. The first and second parts of this chapter provide two different
approaches to understanding how consumers make the decisions that
underlie their demand curves. The third section intoduces the concept of
consumer surplus, which is one part of the “economic surplus” we first
saw in Chapter 5 , and we will see how much consumers really benefit
from their market transactions.