Consumer surplus
Jump to navigation
Jump to search
The printable version is no longer supported and may have rendering errors. Please update your browser bookmarks and please use the default browser print function instead.
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 â however, there will not be any deadweight loss and the market will be efficient.