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Consumer surplus (view source)

Revision as of 05:34, April 30, 2012

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Consumer Surplus is the net benefit a consumer obtains from buying a good.
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'''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.
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(consumer surplus) = (total benefit) - (total cost)
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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 discrimination|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.
    
[[Category:Economics]]
 
[[Category:Economics]]
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