Calculating Consumer Surplus Using Integration
The total consumer surplus can be precisely calculated by treating the quantity () as a continuous variable, which allows for the use of integration. For any given price () and quantity (), whether at market equilibrium or not, the consumer surplus is found by integrating the individual surpluses—the difference between the inverse demand function, , and the price, ��from zero to the total quantity sold, . The integral form is: . This can also be expressed as , where represents the integral of the inverse demand function, , from 0 to . This alternative method involves finding the total area under the demand curve up to the quantity () and then subtracting the total consumer expenditure ().
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Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
Introduction to Microeconomics Course
The Economy 2.0 Macroeconomics @ CORE Econ
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