top of page

Economics explained


Demand and supply

Consumer surplus

Consumer surplus

The secret to scoring awesome grades in economics is to have corresponding awesome notes.
A common pitfall for students is to lose themselves in a sea of notes: personal notes, teacher notes, online notes textbooks, etc... This happens when one has too many sources to revise from! Why not solve this problem by having one reliable source of notes? This is where we can help.
What makes TooLazyToStudy notes different?
Our notes:
  • are clear and concise and relevant
  • is set in an engaging template to facilitate memorisation
  • cover all the important topics in the O level, AS level and A level syllabus
  • are editable, feel free to make additions or to rephrase sentences in your own words!

    Looking for live explanations of these notes? Enrol now for FREE tuition!

Consumer surplus

Consumer surplus arises because some consumers are willing to pay more than the given price for all but the last unit they buy.

Diagram 1 : Consumer surplus

This is represented in the figure below where consumer surplus is the shaded area under the demand curve and above the price line.

It is the difference between the total value consumers place on all the units consumed and the payments they need to make in order to actually purchase that commodity

Diagram 2 : Fall in consumer surplus

When the market price changes, then so does consumer surplus. For example, if the price increases, then consumer surplus is reduced as some consumers are unwilling to pay the higher price.

The loss of consumer surplus is shown by the area P1P2E 1E.

Diagram 3 : Rise in consumer surplus

A fall in the market price will lead to an increase in consumer surplus. This is because consumers who were previously willing to pay above the new market price now end up paying less

bottom of page