Financial Calculators
Consumer Surplus Calculator (consumer Surplus Formula)
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Consumer surplus calculator
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Extended consumer surplus
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Table of contents
A consumer surplus is an economic phenomenon where a consumer is willing to pay more than they are expected to pay for a particular product.
On this page, you can easily count surplus with our calculator. Add your values, and our calculator will calculate your results instantly.
You will also learn how to calculate surplus and also learn the formula behind the economic phenomenon.
What is a consumer surplus?
Consumer surplus is the measure of a customer's excess benefit. It shows how much of a difference the consumer is willing to pay at maximum for a product compared to the actual price they pay.
The concept of consumer surplus is based on the idea of marginal utility, which states that the more a person consumes, the less they are likely to pay for the additional unit.
What is the consumer surplus formula?
The equilibrium price is the price at which the demand and supply meet. The area between the supply and demand levels is known as the producer surplus.
The consumer surplus formula::
Consumer surplus = maximum price customer is willing to pay – actual price
How to calculate consumer surplus?
Calculating consumer surplus is fairly simple to do. Here are step-by-step instructions on how to do it:
1. Find the maximum price that the consumer is willing to pay.
2. Find the actual price of the product in the market
3. Deduct actual price from the maximum price and as a result, you will get consumer surplus
What is extended consumer surplus formula?
On the demand and supply curve, the extended consumer surplus formula is following:
CS = 1/2 x Qd x ΔP
where,
CS = Consumer surplus
Qd = Product quantity at equilibrium
ΔP = Pmax – Pd
Pmax = Maximum price consumer is willing to pay
Pd = the price at equilibrium
Equilibrium is the point where supply and demand are equal.
What is a surplus in economics?
A surplus is several goods or assets that exceed the portion that's used. It can also refer to an unused product that's sitting on store shelves.
A surplus occurs when the demand for a product exceeds the supply--or if people are willing to pay more than others for it. This usually occurs when the market is not set in stone.
What is the law of diminishing marginal utility?
The concept of diminishing marginal utility explains how a person's satisfaction with a product or service decreases as they consume more of it.
The law of diminishing marginal utilities states that the utility of a service or good declines as more customers consume it. This concept argues that economic actors are less satisfied with the number of goods that they consume.
What is the difference between consumer surplus and producer surplus?
The main difference between consumer surplus and producer surplus is that consumer surplus shows the gap between what consumers are willing to pay for a product and the actual price of the product. And the producer surplus shows the difference between the actual price of the product and the minimum price for which the producer is willing to sell the product.
Article author
John Cruz
John is a PhD student with a passion to mathematics and education. In his freetime John likes to go hiking and bicycling.
Consumer Surplus Calculator (consumer Surplus Formula) English
Published: Wed Sep 22 2021
In category Financial calculators
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