AP® Microeconomics · Unit 2 · Topic 2.6
Consumer Surplus
Consumer surplus is the gap between what buyers were willing to pay and what they actually paid, summed across every unit sold. On a graph it's the triangle under the demand curve and above the market price.
Every point on a demand curve is someone's maximum willingness to pay for one more unit. Some buyers would have paid a lot; the market price lets them pay less than that. The difference between what a buyer was willing to pay and what they actually paid is their personal surplus, and consumer surplus is just all of those differences added up across every unit bought.
On a graph with a straight-line demand curve, this adds up to a triangle: the top point sits where demand hits the price axis (the highest willingness to pay), the price line forms the bottom, and the demand curve forms the slanted side. The height of the triangle is the gap between that highest willingness to pay and the market price; the base is the quantity actually bought. Area of a triangle is one half base times height, so that formula does all the work once you know the demand equation and the price.
Consumer surplus is one half of the full picture of gains from trade. Producer surplus, the mirror-image triangle between price and the supply curve, captures what sellers gain. Together they measure total surplus, and anything that shrinks either triangle without shrinking the other proportionally — a tax, a price ceiling, a price floor — creates deadweight loss. Later topics build directly on this: once you can find consumer surplus at one price, you can compare it before and after an intervention and see exactly who loses what.
Key terms
- Consumer surplus
- The total difference between what buyers are willing to pay and what they actually pay, summed over all units bought.
- Willingness to pay
- The maximum price a buyer would accept for one more unit of a good, shown by the height of the demand curve.
- Demand curve
- A line or curve showing the quantity buyers want at each possible price.
- Deadweight loss
- Total surplus lost when a market is pushed away from its equilibrium quantity, such as by a tax or price control.
Watch it explained
- How it worksHow does the triangle between the demand curve and the price measure what buyers gained?
- Worked exampleFind consumer surplus when demand is P = 40 - 2Q and the market price is 10 dollars.
- Worked exampleFind consumer surplus from a schedule where buyers value units at 9, 7, 5, and 3 dollars and price is 4.
- Going furtherWhat happens to consumer surplus when the price falls by 5 dollars?
- Ties togetherHow does consumer surplus trace back to the willingness to pay behind each unit of demand?
Check yourself
End of topic.