1. What is Consumer Surplus?

Consumer Surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay. It represents the economic benefit to consumers.

2. How Does the Calculator Work?

The calculator uses the demand function and price to determine consumer surplus:

Where:

• \( CS \) — Consumer Surplus
• Demand function — Relationship between price and quantity demanded
• Price — Actual market price

Explanation: The calculator finds the area between the demand curve and the price line up to the equilibrium quantity.

3. Importance of Consumer Surplus

Details: Consumer surplus helps measure economic welfare, assess market efficiency, and analyze the impact of policies like taxes or price controls.

4. Using the Calculator

Tips: Enter the demand function as P = f(Q), the current market price, and optionally customize the quantity axis title.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between consumer and producer surplus?
A: Consumer surplus is the benefit to buyers, while producer surplus is the benefit to sellers.

Q2: Can consumer surplus be negative?
A: Normally no, as it represents the additional benefit consumers receive beyond what they pay.

Q3: How does price elasticity affect consumer surplus?
A: More elastic demand curves typically result in smaller consumer surplus as consumers are more price-sensitive.

Q4: What happens to CS when price decreases?
A: Consumer surplus generally increases when price decreases, as more consumers can buy at the lower price.

Q5: How is CS represented on a graph?
A: It's the triangular area below the demand curve and above the price line up to the quantity demanded.