Consumer and Producer Surplus
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Lesson Summary:
In this lesson on Consumer and Producer Surplus, you will learn how to find the equilibrium quantity and price given supply and demand curves, and how to compute consumer surplus, producer surplus, and total social gain at the equilibrium quantity and price. Consumer and producer surplus represent areas under the demand and supply curves, respectively, while total social gain is the sum of both areas. You will also learn how to use the calculator to perform integration and subtraction to obtain the solutions.
Lesson Description:
Be able to explain what consumer surplus, producer surplus, and social gain are in graphical terms given the supply and demand curves.
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Additional Resources:
- Computing Technology for Math Excellence - Devoted to the standards movement and integrating technology into teaching and learning and in K-12 mathematics and calculus. Find software and sites for teaching and learning math with technology. Accessibility resources are included.
Questions answered by this video:
- How do you find the consumer surplus, the producer surplus, and the total social gain by computing integrals on a TI graphing calculator given a demand and supply function that are functions of the quantity?
- How do you find the equilibrium quantity and price given supply and demand functions?
- How do you find the equilibrium quantity and price for a situation using the Equation Solver on a TI graphing calculator?
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Staff Review
This lesson explains the concept of finding where the equilibrium quantity and price are for a given situation if you know the supply and demand functions. You will also learn to use the skill of finding the area between curves to find the consumer surplus, producer surplus, and total social gain. A TI graphing calculator is used to do calculations in this lesson. A good real-world example problem is explained and solved in this lesson.
