The customer surplus (individual or aggregated) is the breadth beneath the (individual or aggregated) appeal ambit and aloft a accumbent band at the absolute amount (in the aggregated case: the calm price). If the appeal ambit is a beeline line, the customer surplus is the breadth of a triangle:
CS = \frac{1}{2} Q_{mkt} \left( {P_{max} - P_{mkt}} \right)
Where Pmkt is the calm amount (where accumulation equals demand), Qmkt is the absolute abundance purchased at the calm amount and Pmax is the amount at which the abundance purchased would abatement to 0 (that is, area the appeal ambit intercepts the amount axis). For added accepted appeal and accumulation functions, these areas are not triangles but can still be begin application basic calculus. Customer surplus is appropriately the audible basic of the appeal action with account to price, bare the audible basic of the connected action D(P)=Qmkt (i.e. PmktQmkt), from the bazaar amount to the best catch amount (i.e. the price-intercept of the appeal function):
CS = \int^{P_{max}}_{P_{mkt}} D(P)\, dP
The blueprint shows, that if we see a acceleration in the calm amount and a abatement in the calm quantity, again customer surplus falls.
CS = \frac{1}{2} Q_{mkt} \left( {P_{max} - P_{mkt}} \right)
Where Pmkt is the calm amount (where accumulation equals demand), Qmkt is the absolute abundance purchased at the calm amount and Pmax is the amount at which the abundance purchased would abatement to 0 (that is, area the appeal ambit intercepts the amount axis). For added accepted appeal and accumulation functions, these areas are not triangles but can still be begin application basic calculus. Customer surplus is appropriately the audible basic of the appeal action with account to price, bare the audible basic of the connected action D(P)=Qmkt (i.e. PmktQmkt), from the bazaar amount to the best catch amount (i.e. the price-intercept of the appeal function):
CS = \int^{P_{max}}_{P_{mkt}} D(P)\, dP
The blueprint shows, that if we see a acceleration in the calm amount and a abatement in the calm quantity, again customer surplus falls.
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