Index
The Demand Curve 1
The Demand Curve 2
The Demand Curve 3
The Laws of Supply and Demand - 4
The Laws of Supply and Demand - 5
A ''Contraction'' of Demand - 6
''Ceteris Paribus'' - 7
An ''Expansion'' of Demand - 8
Marginal Utility - 9
Marginal Utility - 10
Marginal Utility - 11
Marginal Utility - 12
Consumer Surplus - 13
Consumer Surplus - 14
Price Discrimination - 15
An ''Expansion'' of Supply - 16
An ''Expansion'' of Supply - 17
Market Equilibrium - 18
Market Equilibrium - 19
Market Equilibrium - 20
Movements of the Demand Curve - 21
Movements of the Demand Curve - 22
Movements of the Demand Curve - 23
Inferior Goods - 24
Movements of the Demand Curve - 25
Movements of the Supply Curve - 26
Movements of the Supply Curve - 27
Movements of the Supply Curve - 28
The Income Effect - 29
The Substitution Effect - 30
The Substitution Effect - 31
The Substitution Effect - 32
The Substitution Effect - 33
Complements - 34
Complements - 35
Review: Factors Effecting Demand - 36
Review: Factors Effecting Demand - 37
The Goals of Firms - 38
The Goals of Firms - 39
To: Elasticity

Consumer Surplus - 14

The monopoly supplier may make you the ''all or nothing'' ultimatum. "If you want nine items, you must pay me more, or I won't sell you any." What will you do? Undoubtedly, you will pay more than $108 for all nine items; the alternative is to not gain any satisfaction at all from the good.

There is a difference between total utility and total market revenue. The consumer always gets more than they pay for; but it is not at the expense of the seller.

The value of the transaction is different for the consumer and the supplier. The utility gained by the consumer is the red area in the graph above, plus the blue area. The market value of the transaction is the blue area, alone. Hence, the consumer surplus is the red area.