Summary IB Economics HL Consumer and Producer Surplus Cheat Sheet

surplus P
Consumer
Surplus
a
◦

s =
MC
•

Producer Surplus
C,
↳
(the highest price consumers CONSUMER
←
( Price relieved by firms for
SURPLUS

willing to
' '




for selling good)
are their
pay a ( the lowest
-




good)
-




( the price actually paid ) lo willing to accept
price they t are


D= MB
°

Below Demand Curve PRODUCER produce the
good )
SURPLUS
& Below Above
price paid by supply curve & below the
•

consumer
so

upto Qty purchased ☆ Allocate Zffeciency achieved at market equilibrium
price relieved firm upto
by the
.
:
,




when MB =
Me & social surplus is maximum / Social Welfare is maximum
Qty produced
.
.




↳

social
/ community surplus = Consumer Surplus + Producer
Surplus
At Market Equilibrium :
Marginal Benefit =
Marginal cost ;

↳
Market producing Qty of goods making the best
possible of resources
: -

is .
use scarce .




Consumer Surplus =
1 ✗ b × h ( of consumer
surplus A)
=
( P intercept of Demand -
P intercept at And ) ✗ Bs
2
2




Producer Surplus b h ( P intercept P intercept Qsdd ) Qs
1- Supply at
✗
of
= ✗ = -
✗


2
2

↳ In where has P
cases
supply curve no
intercept
A
Trapezium
atb,
PS =

of =
(