Market research is unreliable to determine optimal prices in a given market. An experiment done in Germany has found a more reliable way. The experiment measured brain waves of consumers while showing them cups of coffee with a price tag. The researchers measured brain waves and were able to determine the highest prices consumers were willing to pay for the coffee before the waves indicated negative feelings.
Consumer surplus is the gain acquired when a consumer buys something for less than they were willing to pay. Producer surplus is the gain acquired when producers sell something for higher than the least amount they were willing to sell it for. If producers are table to tap into this research with brain waves, they will be able to eliminate consumer surplus and maximize profits.
