Consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay. It represents the benefit consumers receive when they purchase a product for less than the maximum price they would be willing to pay. This surplus indicates consumer satisfaction and demand in the market. Producer surplus is the difference between the amount producers receive for a good or service and the minimum amount they would accept to produce it. It reflects the benefit producers gain from selling at a higher price than their costs. Together, consumer and producer surplus measure the overall economic welfare in a market.