Check out Naval’s Episode Page & Show Notes
This podcast clip is part of a conversation between Naval Ravikant and Babak Nivi. Unless otherwise noted, quotes are from Naval. For reference, check out Naval’s famous How to Get Rich tweet storm.
- Consumer surplus is the excess value that somebody gets from a purchase
- Even though certain individuals may be willing to pay more, the product is priced the same for everyone
- For example – Take coffee
- Some people (like Naval) would probably pay $20 for their morning cup of coffee at Starbucks (but Starbucks doesn’t know that)
- All businesses generate consumer surplus
- Amazon probably generates trillions of dollars worth of consumer surplus based on the amount of convenience they provide for people