EcontTutor | Economics Tutors for students from top universities

IB Economics Tutor near London and Online

Experienced IB Economics teachers in London for private tutoring lessons and exam preparation.

IB Economics tutor london online

Consumer Surplus

The idea of consumer surplus is what a consumer stands to gain when he or she buys a good at the market price. A demand curve illustrates all points that quantity demanded at each price that a consumer is willing to buy. For example, in (a) Lisa is willing to pay 2 for the 10th slice. since the price of Pizza is $1, she ends up buying it at the market price of $1. This gives Lisa a consumer surplus of $1 [$2 (what she was willing to pay for the slice) – $1 (what she actually paid for the slice)]. Our IB Economics tutor available near London and online prepare specialized tutorial sessions similar to this one.

Lisa’s total consumer surplus is the sum of all consumer surplus from each slice. That is, the area bounded below the demand curve and above the price is Lisa’s consumer surplus.

Nick has a lesser consumer surplus because his demand curve is such that he is not willing to pay as much for Pizza as Lisa. Regardless, Nick still has some consumer surplus.

(C) shows the total market consumer surplus is the sum of consumer surplus of all consumers who participate in the market.

Work with our IB Economics Tutor near London and available online on-demand 24/7.

London IB Economics Tutor A Levels Economics

Producer Surplus

Producer Surplus is the area above the supply curve and below the market price. Graph (a) shows Max’s producer surplus. For 50th pizza per month, the minimum amount Max will charge is 10 but he is able to sell it at 15, which is a surplus of 5 for Max. Thus his total producer surplus is the sum of producer surplus for all pizza that he produces and sells.

Notedly, our IB Economics tutors will prepare students for microeconomics and macroeconomics free response questions and long-essay questions.

Loader Loading...
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Other popular courses:

Get Started

See the #1 economics
mentoring platform in action

Request a demo
logo EconTutor | Professional Economics tutors for students from top universities of New York, London, Boston, Chicago

Contact Us

Let us know how we can help you! We're here to answer your questions, so fill out the contact form and we'll respond as soon as we can.