Consumer surplus

From Conservapedia
This is the current revision of Consumer surplus as edited by Aschlafly (Talk | contribs) at 00:34, 30 April 2012. This URL is a permanent link to this version of this page.

(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to: navigation, search

Consumer surplus is the net benefit a consumer obtains from buying a good. In supply and demand models, consumer surplus is represented as the value (price times quantity) captured above the price level but below the demand curve.

In a monopoly, the loss in total surplus (known as social loss) is from a reduction is the consumer surplus while producer surplus does not rise accordingly. However, if a monopoly can perfectly price discriminate the consumer surplus in the market will be zero, since the monopoly extracts all benefits — however, there will not be any deadweight loss and the market will be efficient.