Unit 1 Economics

Consumer Surplus
 Consumer Surplus
⚫ Consumer surplus is the utility enjoyed by consumers without
having to pay for it.
⚫ Amount willing to pay - Amount actually paid
Consumer Surplus on a Graph
Factors that affect CS
⚫ The lower the equilibrium price (from more supply) the
greater is the consumer surplus. (ceteris paribus)

⚫ The greater the price elasticity of demand (or the flatter

the demand curve) the lower the consumer surplus
(assuming no change in supply). (ceteris paribus)