1. Surplus Macroeconomics
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2. Consumer and Producer Surplus Graphed

3. Consumer and Producer Surplus Definitions
Consumer surplus is the gap between the price that consumers are willing to pay, based on their preferences, and the market equilibrium price.
Producer surplus is the gap between the price for which producers are willing to sell a product, based on their costs, and the market equilibrium price. 

4. Social Surplus
The sum of consumer surplus and producer surplus is social surplus, also referred to as economic surplus or total surplus. In Figure 1, social surplus would be shown as the area F + G.
Social surplus is larger at equilibrium quantity and price than it would be at any other quantity
This demonstrates the economic efficiency of the market equilibrium
At the efficient level of output, it is impossible to produce greater consumer surplus without reducing producer surplus, and it is impossible to produce greater producer surplus without reducing consumer surplus

5. Consumer and Producer Surplus for Linear Supply and Demand Curves
Principles of Microeconomics Chapter 3.5. Authored by: OpenStax College. Located BY: Attribution. License Terms: Download for free at

6. Area of a Triangle
Principles of Microeconomics Chapter 3.5. Authored by: OpenStax College. Located BY: Attribution. License Terms: Download for free at

7. How to Calculate Consumer Surplus for Linear Supply and Demand Curves
Step 1 Define the base and height of the consumer surplus triangle
Step 2 Apply the values for base and height to the formula for the area of a triangle

8. Price Controls are Inefficient and Reduce Social Surplus
Principles of Microeconomics Chapter 3.5. Authored by: OpenStax College. Provided by: Rice University. Located BY: Attribution. License Terms: Download for free at

9. Deadweight Loss
A price floor transfers more of the surplus to producers, but the gain to producers is less than the loss to consumers
A price ceiling transfers more of the surplus to consumers, but the gain to consumers is less than the loss to producers
Deadweight loss is loss in total surplus that occurs when the economy produces at an inefficient quantity

10. Practice Question
If economists believe price controls are inefficient, why do they persist?
Some consumers and producers are winners and they lobby to maintain them. They can also be popular if they are consistent with widely held normative beliefs, such as no one who works full time should live in poverty.

11. Quick Review What is consumer surplus and how is it calculated?
What is producer surplus and how is it calculated?
What is total (social) surplus and how is it calculated?
How do the concepts of consumer, producer and total surplus explain why markets typically lead to efficient outcomes?