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Get Started Now- Intro Lesson: a5:37
- Intro Lesson: b4:38
- Intro Lesson: c4:12

__Consumer Surplus__

**Consumer Surplus:** the difference between what consumers are willing to pay and what they actually pay.

*Algebraically,* we calculate this as

*Graphically,* we calculate this by finding the area under the demand curve and above the price paid, up to the quantity bought. Since the demand and supply curve are linear, most of the consumer surplus we see are triangles.

Recall the area of triangle is:

Our goal is to always maximize economic surplus. Economic surplus is always maximized at the market equilibrium, which we consider to be

- Introduction
**Consumer & Producer Surplus Overview:**a)__Consumer Surplus__- Willing to pay vs actually pay
- Algebraic Calculation of Consumer Surplus
- Graphical Calculation of Consumer Surplus
- An Example

b)__Producer Surplus__- Price producer receives vs minimum price producer accepts
- Algebraic Calculation of Producer Surplus
- Graphical Calculation of Producer Surplus
- An Example

c)__Economic Surplus__- The total benefit from consumer and producer
- Sum of consumer surplus and producer surplus
- Goal is to maximize economic surplus
- An Example