How to calculate consumer surplus

Each item in a catalog of products and services has a specific value. Pricing is one of the most important decisions in the business plan of a business. In this regard, it is important to know what the consumer surplus is . That is, how much a customer could pay for a specific good above the cost set in the rate of that proposal.

Why consumer surplus is important

What is the difference between these two variables? The identification of this data brings light to the business itself. When a consumer acquires a product that he values ​​for the practical utility that this instrument has in his life, this purchase gives him a subjective well-being. When, at the moment of making the purchase, the client acquires that proposal for an amount of money that expresses a lower figure than he would really be willing to pay, then he experiences an advantage from this reading of reality.

However, the vision of that good also changes depending on the circumstances that vary over time. For example, the value that the user gives to that proposal is greater in that first time, on the contrary, this perception may gradually approach the real price of said article on subsequent occasions when this same action is repeated. This consumer surplus is closely linked to a very important market data: the law of supply and demand. On the other side of the balance it also happens that the producer has an expectation different from the price depending on the moment in which it is located. In the initial stage, it values ​​the possibility of offering the catalog with cheaper rates.

This advantage that a customer can experience in the purchase process is important for him, since this data influences the management of his economy. For example, the protagonist will have the opportunity to invest this amount in other possible proposals that are part of his lifestyle. If you prefer, you can also use this figure for the purpose of saving. When analyzing this concept, a professional can observe his trade seen from the other’s gaze.

The consumer surplus in the microeconomics

The surplus can be interpreted from different points of view in the market. From the vision of the consumer and also from the position of the producer. The interpretation is different in each case. These data are important in the microeconomics plane. The person in charge of a project managed by his own company can also clarify this issue to have a broader vision of his initiative.

Therefore, to calculate what the consumer surplus is, you must specify the difference between the figure he would be willing to pay for a good and the actual cost of that item. To carry out this representation, you can also use the visual language of the structure of a graph that takes as reference the law of supply and demand in this market scenario that is the subject of analysis.


by Abdullah Sam
I’m a teacher, researcher and writer. I write about study subjects to improve the learning of college and university students. I write top Quality study notes Mostly, Tech, Games, Education, And Solutions/Tips and Tricks. I am a person who helps students to acquire knowledge, competence or virtue.

Leave a Comment