What is consumer surplus?
When there is a difference between the price that you pay in the market and the value that you place on the product, then the concept of consumer surplus becomes a useful one to look at. This is an important idea that you can use on many occasions in your exams.
Consumer surplus and economic welfare
Check out this revision presentation which will take you through the key aspects of this topic
Consumer surplus and price elasticity of demand
How is consumer surplus affected by the elasticity of a demand curve?
Consumer surplus with elastic and inelastic demand curves
When there is a shift in the demand curve leading to a change in the equilibrium market price and quantity, then the level of consumer surplus will change too
Price discrimination and consumer surplus
Price discrimination and market power
One of the main arguments against firms with monopoly power is that they can exploit their monopoly position by raising prices in markets where demand is inelastic, extracting consumer surplus from buyers and increasing profit margins at the same time.
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