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Questions tagged [consumer-surplus]

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7 votes
2 answers

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 ...
Giskard's user avatar
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11 votes
3 answers

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 ...
Jamzy's user avatar
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5 votes
1 answer

Is the consumer surplus on a Giffen/Veblen good negative?

When drawing the demand and supply curves on a quantity/product space for an upwards sloping demand, assuming the two curves intersect, I noticed that the traditional consumer surplus region lies ...
tox123's user avatar
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4 votes
1 answer

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 ...
Krowskir's user avatar
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3 votes
4 answers

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 ...
EconJohn's user avatar
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2 votes
1 answer

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=\...
user avatar
1 vote
1 answer

Can consumer surplus be negative if a consumer is forced to make a purchase?

Assume there is a good that a producer sells for $100$. A consumer's willingness to pay for that good is $50$. However a government program forces consumers to purchase the good irrespective of their ...
Joseph's user avatar
  • 305
-3 votes
1 answer

Why is a contractor's profit considered a producer surplus instead of being complementary with marginal utility? [closed]

Do economists currently not view contractors as labor? I suggest producer surplus be exclusively exclusive material (for otherwise even mining and logging would not need withstand fixed-startup costs ...
Nick Carducci for Carface Bank's user avatar