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Topic: Consumer surplus


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  Consumer surplus - Wikipedia, the free encyclopedia
Consumer surplus or Consumer's surplus (or in the plural Consumers' surplus) is the economic gain accruing to a consumer (or consumers) when they engage in trade.
The change in consumer's surplus is difference in area between the two triangles, and that is the consumer welfare associated with expansion of supply.
The idea of consumer's surplus was due to Jules Dupuit and extended by Alfred Marshall.
en.wikipedia.org /wiki/Consumer_surplus   (440 words)

  
 Economic surplus - Wikipedia, the free encyclopedia
Total surplus is the primary measure used in Welfare Economics to evaluate the efficiency of a proposed policy.
A basic technique of bargaining for both parties is to pretend that their surplus is less than it really is: sellers may argue that the price they asks hardly leaves them any profit, while customers may play down how eager they are to have the article.
In heterodox economics, the economic surplus denotes the total income which the ruling class derives from its ownership of society's (productive) assets, which is either reinvested or spent on consumption.
en.wikipedia.org /wiki/Consumer_and_producer_surplus   (327 words)

  
 Consumer and producer surplus   (Site not responding. Last check: 2007-11-03)
Consumer surplus is the difference between the amount that consumers actually pay and the amount that they would have been willing to pay.
Consumer surplus can be shown as the area “c” under the demand curve and above the prevailing market price.
Producer surplus is the difference between the amount that producers actually receive and the minimum amount that they would have to receive in order to supply the given level of output.
www.eco.utexas.edu /graduate/Konstantinova/3_Surplus.htm   (598 words)

  
 Economic Analysis of Projects - Appendix 4 : Identification and Measurement of Consumer Surplus - ADB.org
Consumer surplus equals the sum across all consumers of the differences between the price actually paid for the project output and what buyers would be willing to pay for it.
Consumer surplus from nonincremental output is estimated by multiplying the difference between the price of project output with the project and the price of project output without the project by the quantity of nonincremental project output (area a in Figure 1).
Consumer surplus on incremental output is Rp97,290 and consumer surplus on nonincremental output is Rp710,818.
www.adb.org /Documents/Guidelines/Eco_Analysis/appendix4.asp   (1574 words)

  
 [No title]
In this case, consumer surplus is area A, while producer surplus is area B + C. We can use these measures of welfare to estimate the value of the efficiency loss associated with a monopoly.
Notice that the consumer surplus in the world trade graph is equal to the surplus gained by the U.S. (the world’s net consumer or importer) and the producer surplus in the world trade graph is equal to the surplus gain in Mexico (the world’s net producer or exporter).
Part of this lost consumer surplus is captured by producers as an income transfer (area B) and part of it is captured by the federal government as tariff revenue (area E), but part is not captured by either producers or the government (areas D and F).
web.nps.navy.mil /~brgates/documents/policynotes/cs-ps.doc   (5972 words)

  
 David Friedman, Price Theory: Chapter 4: Marginal Value, Marginal Utility, and Consumer Surplus
Your consumer surplus from buying wine at some price is the value to you of being able to buy as much wine as you wish at that price--the difference between what you pay for the wine and what it is worth to you.
You are consuming 4 cookies and 9 apples each week; at that level of consumption, the marginal utility of a cookie is 3 utiles and the marginal utility of an apple is 2 utiles (remember that the marginal utility of something depends both on your preferences and on how much you are consuming).
Consumer surplus, however, has risen by the colored area on Figure 4-8, which is $0.75; he can raise the admission price by that amount without losing customers.
www.daviddfriedman.com /Academic/Price_Theory/PThy_Chapter_4/PThy_Chapter_4.html   (11027 words)

  
 Efficiency   (Site not responding. Last check: 2007-11-03)
When consumers buy something they do so because they expect that the satisfaction they get (in dollar terms) is greater than the price they had to pay...otherwise they wouldn't have bought the good.
Consumer surplus is measured as the satisfaction consumers get from buying a product after we deduct what they paid for it.
The net benefit to consumers who bought the three units is measured as the area described by the consumer surplus ($450).
www.wsu.edu:8080 /~hallagan/Econ101/Weeks/Week3/practice.html   (494 words)

  
 Microeconomics
Customer D, the so-called "marginal" consumer, is willing to pay $6 for a unit, but since the market price is $6, D gets no consumer surplus.
In practice, consumer surplus is pictured as in figure 4.a.2, as the area below the demand curve, above the price, and left of the quantity bought.
If the price falls to $4, existing consumers save $3 per unit on the 10 units they were already buying, for a gain of $30 (green) in consumer surplus.
www.csun.edu /~hceco008/c4a.htm   (327 words)

  
 Consumer Surplus
In other words, consumers' surplus is the difference between the value in use of an item and its value in exchange.
Notice that consumers' surplus is not related to the type of surplus that occurs in a market when price is above market-clearing price.
Perhaps economists would have avoided this possible confusion if they had used a term other than consumers' surplus for this concept, but they did not and the term is now well-established.
www.ingrimayne.com /econ/MaximizingBeha/ConSurplus.html   (648 words)

  
 Consumer Surplus
Consumer surplus is defined as the difference between what consumers are willing to pay for a unit of the good and the amount consumers actually do pay for the product.
The new level of consumer surplus is now given by the sum of the blue and yellow areas in the Figure.
Their consumer surplus is given by the triangular area b in the diagram.
internationalecon.com /v1.0/ch90/90c080.html   (688 words)

  
 [No title]
Consumer surplus is the difference between what a consumer is willing to pay for the quantity of good purchased and what the good actually costs Graphically, for each individual, the consumer surplus is the area under the demand curve and above the market price up to the quantity the consumer buys.
Graph1: Graph 2: Market consumer surplus is the area under the market demand curve above the market price, up to the quantity consumers buy.¡JSs: dóŸ¨-Effects of a price change on consumer surplus¡.. Ÿ¨Graph: Consumer surplus loss from a higher price Problem: Consider two demand curves that go through an initial equilibrium point e1.
Calculate the change in consumer surplus, producer surplus and social welfare if the city government requires those people supplying such trips to possess a special license, and the government will issue only 300 licenses.
www.unc.edu /~ielceanu/101section8.ppt   (500 words)

  
 Demand, Supply, and Surpluses   (Site not responding. Last check: 2007-11-03)
Consumer B gets only $8 worth of happiness fom a cake, which is why he will not buy one for $9, but will buy one for $8.
Consumer B pays $5 for a cake that provides him $8 worth of happiness, so his consumer surplus is only $3.
Consumer E pays $5 for something that provides her with exactly $5 of happiness, so her consumer surplus is zero.
faculty.uwb.edu /danby/bls324/surplus.html   (1026 words)

  
 Tutor2u - consumer surplus
Consumer surplus measures the welfare that consumers derive from their consumption of goods and services, or the benefits they derive from the exchange of goods.
Consumer surplus is the difference between what consumers are willing to pay for a good or service (indicated by the position of the demand curve) and what they actually pay (the market price).
Consumer surplus initially was shown by the triangle AP1C.
www.tutor2u.net /economics/content/topics/marketsinaction/consumer_surplus.htm   (529 words)

  
 Chapter Notes
Consumer surplus, which is the difference between people's willingness to pay and the price they actually pay, is the blue area in the figure at right (area ABC).
In the figure at right, consumer surplus (the area above the price, P*, and below the demand curve) is the blue area, and producer surplus (the area below the price, P*, and above the supply curve) is the red area.
Total surplus is the sum of the blue and red areas in the figure.
www.lclark.edu /~bekar/Mankiw/ch07/notes.htm   (701 words)

  
 Economic Efficiency and the Gains from Trade
Consumer surplus is the benefit to a consumer of being able to buy a good at the equilibrium price.
Producer surplus is the benefit to a producer/seller of being able to sell a good at the equilibrium price.
Consumer surplus is A, producer surplus is F, government tax revenue is B + D, and the deadweight social loss is C + E. Without a subsidy, consumer surplus is area A + B
www.econ.rochester.edu /eco108/ch9/summ9.html   (709 words)

  
 [No title]
Consumer surplus is the area below the demand curve and above the price, which equals each buyer's willingness to pay less the price of the good.
Thus consumer surplus rises by $5 (which is the size of area B) when the price of a bottle of water falls from $4 to $2.
Consumer surplus in the software market changes from B + C to A + B, a net change of A — C. Producer surplus changes from E to C + D + E, an increase of C + D, so software producers should be happy about the technological progress in computers.
www.econ.umn.edu /~fyang/Summer03_1101/Ch7.doc   (3189 words)

  
 [No title]   (Site not responding. Last check: 2007-11-03)
In terms we used earlier, the consumer purchases widgets until the marginal benefit of the last widget is equal to p0.
Consumer surplus is areas I, II and III, which is a right triangle with a base of 16 and a height of 8, for a total area of $64.
Consumer surplus drops to area I. Area II represents an income transfer to the government.
www.uta.edu /dpwilson/intermediate/l04.doc   (1285 words)

  
 Producer and Consumer Surplus Illustrated
The producers' and consumers' surpluses are illustrated with supply and demand curves in the figure below.
The total value to consumers of quantity Q is represented by areas A+B+C. Because the consumers must pay B+C, only the area A is surplus for them.
The consumers' surplus at price Pc is A+B+D. The producers' surplus at this price is C+E. By raising price to Pm, sellers cause the consumers' surplus to shrink to the area A.
www.ingrimayne.com /econ/MaximizingBeha/PandCSurplusIllust.html   (462 words)

  
 Consumer Surplus   (Site not responding. Last check: 2007-11-03)
Table 3 presents the consumer surplus -- the benefit achieved beyond the buyers' willingness to pay -- obtained by the simulated buyers for the usual combinations of seller strategies.
Notice, however, that the introduction of a single GT pricebot substantially increases consumer surplus; similarly, the introduction of a GT pricebot into a group of otherwise MY pricebots leads to even greater increases in consumer surplus.
Interestingly, however, the greatest consumer surplus is seen, not when all pricebots are GT strategists, but rather when one pricebot plays MY and the remainder play GT.
www.research.ibm.com /infoecon/paps/html/ec99/node11.html   (180 words)

  
 [No title]
Welfare losses are measured by the concepts of consumer and producer surplus.
Consumer Surplus Suppose the demand for ice cream cones is Qd = 20 - 10P, and the supply of ice cream cones is Qs = 10P.
Thus, the actual producer surplus is $.50 higher than the table indicates.
web.nps.navy.mil /~brgates/documents/micronotes/cs-ps.doc   (2739 words)

  
 POP HOMEWORK ASSIGNMENT - II   (Site not responding. Last check: 2007-11-03)
Using a graph, illustrate the consumer surplus, and the change in consumer surplus in response to a price increase.
Consumer surplus is the difference between what consumers are willing to pay for a good and what they actually pay.
In a graph, consumer surplus can be illustrated by the triangle below the demand curve and above the price line.
econ.la.psu.edu /~cyavas/econ333/pophw2.htm   (592 words)

  
 [No title]
We will begin with the definition: Consumer SurplusConsumer surplus is the difference between what a consumer(s) would have been willing to pay for a certain quantity of a good, and what that consumer(s) actually had to pay.
To get a firm grasp of what consumer surplus is all about, let’s return to our CD example.
Producer Surplus — Producer surplus is the difference between what a producer(s) received when supplying a certain quantity of a good, and what the producer(s) would have been willing to accept for that quantity of the good.
www.davidson.edu /academic/economics/smith/fhs/101/CS.doc   (819 words)

  
 Consumer and Producer Surplus [ Biz/ed Virtual Developing Country ]   (Site not responding. Last check: 2007-11-03)
Consumer surplus is a measure of consumer welfare gained by consumers being able to purchase a good or service in the market at a price lower that the maximum that they would be prepared to pay for it rather than going with out it.
Producer surplus is the difference between the revenue that the firms would earn from offering a good or service for sale rather than not selling it and the revenue that they are able to achieve by selling it at the market price.
The producer surplus is shown in the diagram below by the triangle below the equilibrium price and above the supply curve.
www.bized.ac.uk /virtual/dc/trade/theory/th16.htm   (184 words)

  
 ipedia.com: Economic surplus Article   (Site not responding. Last check: 2007-11-03)
The consumer surplus shows up above the price and below the demand curve, since the consumer is paying less for the item than the maximum that they would pay.
The producer surplus shows up below the price and above the supply curve, since that is the minimum that a producer can produce that quantity with.
A basic technique of bargaining for both parties is to pretend that one's surplus is less than it really is: the seller may argue that the price he or she asks hardly leaves him or her any profit, while the customer may play down how eager he or she is to have the article.
www.ipedia.com /economic_surplus.html   (350 words)

  
 Welfare_economics
The marginal rates of substitution in consumption are identical for all consumers (i.e., no consumer can be made better off without making others worse off).
The consumers' relative preferences are shown by the indifference curves inside the Edgeworth box.
As we move along the curve, we are changing the mix of goods X and Y that individuals 1 and 2 choose to consume.
www.brainyencyclopedia.com /encyclopedia/w/we/welfare_economics.html   (2241 words)

  
 Journal of Real Estate Research, The: Estimation of Consumer Surplus Benefits from a City Owned Multipurpose Coliseum ...   (Site not responding. Last check: 2007-11-03)
Coliseums can create consumer surplus benefits by providing types of entertainment to local residents that would otherwise not be available to them.
A novel aspect of this paper is that it estimates the distribution of consumer surplus across households of different income levels, as well as aggregate consumer surplus.
It is estimated that aggregate consumer surplus from the GCC in 1999 exceeded the public subsidy for this complex, but a disproportionate amount of the consumer surplus benefits go to higher income households.
www.findarticles.com /p/articles/mi_qa3750/is_200504/ai_n13638906   (342 words)

  
 Frank Chapter 7 Problems   (Site not responding. Last check: 2007-11-03)
The first consumer would be willing to pay $26 for a unit, the second would be willing to pay $24 for a unit -- and so on.
Total CS Producer surplus is area C, given by the triangle with height 7.50 - 6 = 1.50 and base 2, area = 1/2 (1.50) 2 = $1.50.
This is $38 more in consumer surplus than was present under the first-come, first-served policy.
www.pitt.edu /~upjecon/MCG/MICRO/chap7p.htm   (1693 words)

  
 [No title]
In competitive equilibrium there is a Producer Surplus (PS) that represents profit to the firm, and a Consumer Surplus (CS) that represents gains to the buyer.
Area A represents the consumer surplus; area B represents the producer surplus.
Area A is the Consumer Surplus, and area B+D+F is the Producer Surplus.
www.csun.edu /~hceco008/c12b-ac.doc   (977 words)

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