What is Economic Surplus?

Category: Economics

1Definition

The total benefit to society from a transaction—the sum of consumer surplus and producer surplus.

2Context

Economists use surplus to evaluate whether policies increase or decrease overall welfare.

3Example

If you'd pay $50 for a concert ticket but pay only $30, your consumer surplus is $20 of 'extra' value.

⚠Common Trap

Economic surplus isn't leftover goods—it's the difference between what people would pay and what they actually pay.

More Economics Terms

Get clear definitions without the jargon