Questions tagged [consumer-surplus]

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7
votes
2answers
9k views

Consumer surplus in case of perfectly inelastic demand

How do we define consumer surplus in the case of perfectly inelastic demand? This question was inspired by the comments following this answer. For a graph of inelastic demand please also see the ...
11
votes
3answers
518 views

Price discrimination- how much is optimal?

I am of the understanding that as a general rule, price discrimination does not benefit consumers. Yet I can think of a situation where it does. Look at two countries, Australia and India. The price ...
4
votes
1answer
21k views

Equilibrium price and quantity - consumer and producer surplus

Inverse function of market demand for certain good is equal to $P=100-0.25Q$, inverse supply function is $P=20+0.55Q$. Calculate equilibrium price and quantity. Furthermore calculate consumer and ...
3
votes
4answers
559 views

what is consumer surplus practically?

In Microeconomics producer surplus is equivalent to profits minus fixed costs. However getting a tangible definition of consumer surplus has been difficult for me to ponder. What is the practical ...
1
vote
1answer
110 views

Dead Weight Loss (Tax)

Problem Given demand $D(p)=A-ap$, and $A,a>0$ and a fixed price $0<p_1<A/a$ by some company. My solution so far CS is $CS=\int_{p}^{A/a}D(p)dp=\int_{p}^{A/a}(A-ap)dp=\frac{1}{2a}(A-ap)^2=\...