Consumer and Producer Surplus

Quantity (Q) Price (P) 50 50 D S
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Equilibrium Price (P*) 50
Equilibrium Quantity (Q*) 50
Consumer Surplus 1250
Producer Surplus 1250
Consumer Surplus Calculation:
Area of Triangle = ½ × Base × Height
• Base (Quantity) = 50
• Height (Max Price - P*) = 100 - 50 = 50
CS = ½ × 50 × 50 = 1250
Producer Surplus Calculation:
Area of Triangle = ½ × Base × Height
• Base (Quantity) = 50
• Height (P* - Min Price) = 50 - 0 = 50
PS = ½ × 50 × 50 = 1250
Total Social Surplus Calculation:
Social Surplus = Consumer Surplus (CS) + Producer Surplus (PS)
• Consumer Surplus (CS) = 1250
• Producer Surplus (PS) = 1250
Total Social Surplus = 1250 + 1250 = 2500