AP Microeconomics / Unit 2: Supply and Demand
2.6 Market Equilibrium and Consumer and Producer Surplus
Notes
- Consumer surplus: area below demand and above price.
- Producer surplus: area above supply and below price.
- At equilibrium, total surplus is maximized (allocative efficiency).
Practice
Consumer surplus is:
Extra value to buyers.
You'd pay 10 dollars for a book that costs 6 dollars. Your consumer surplus:
$10-6$.
Total surplus is greatest at:
Allocative efficiency.
Ready for more? Take the Unit 2 test.