Information about Economic Surplus

:This page deals with the various forms of economic surplus, including producer, consumer, government, and social/total surplus. For information about a budget surplus, see budget deficit.

The term surplus is used in economics for several related quantities. The consumer surplus is the amount that consumers benefit by being able to purchase a product for a price that is less than they would be willing to pay. The producer surplus is the amount that producers benefit by selling at a market price that is higher than they would be willing to sell for. Note that producer surplus flows through to the owners of the factors of production, unlike economic profit which is zero under perfect competition. If the markets for factors are perfectly competitive as well, producer surplus ultimately ends up as economic rent to the owners of scarce inputs such as land.

Details

On a standard supply and demand diagram, consumer surplus shows up as a triangle above the price and below the demand curve, since intramarginal consumers are paying less for the item than the maximum that they would pay.

Producer surplus shows up as a triangle below the price and above the supply curve, since that is the minimum that a producer can produce that quantity with.

If the government intervenes, using, for example, a tax or a subsidy, then the graph of supply and demand becomes more complicated and will also include an area that represents government surplus.

Combined, the consumer surplus, the producer surplus, and the government surplus (if present) make up the social surplus or the total surplus. Total surplus is the primary measure used in Welfare Economics to evaluate the efficiency of a proposed policy.

A basic technique of bargaining for both parties is to pretend that their surplus is less than it really is: sellers may argue that the price they asks hardly leaves them any profit, while customers may play down how eager they are to have the article.

In national accounts, operating surplus is roughly equal to distributed and undistributed pre-tax profit income, net of depreciation.

In heterodox economics, the economic surplus denotes the total income which the ruling class derives from its ownership of scarce factors of production, which is either reinvested or spent on consumption.

In Marxian economics, the term surplus may also refer to surplus value and surplus labour.

See also

• consumer surplus
• microeconomics
• negotiation
• profit
• surplus value
• surplus economics
• Scarcity rent
• Georgism

References

• Monopoly capital: an essay on the American economic and social order, Paul A. Baran and Paul M. Sweezy
• The Economic surplus in advanced economies, John B. Davis (Ed)
• The economic surplus and neo-Marxism, Ron J. Stanfield

Further reading

• Henry George, Progress and Poverty http://www.econlib.org/library/YPDBooks/George/grgPP.html

•  • [ e] Topics in microeconomics
Scarcity • Opportunity cost • Supply and demand • Elasticity • Economic surplus • Economic shortage • Aggregate demand • Consumer theory • Production, costs, and pricing • Market form • Welfare economics • Market failure

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Economic policy
Monetary policy
Central bank   Money supply
Fiscal policy
Spending   Deficit   Debt
Trade policy
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Finance
Financial market
Financial market participants
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Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Greek for oikos (house) and nomos (custom or law), hence "rules of the house(hold).
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Consumer surplus or Consumer's surplus (or in the plural Consumers' surplus) is the difference between the price consumers are willing to pay (or reservation price) and the actual price.
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surplus is used in economics for several related quantities. The consumer surplus is the amount that consumers benefit by being able to purchase a product for a price that is less than they would be willing to pay.
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In economics, factors of production are resources used in the production of goods and services, including land, labor, and capital.

Land, labor, and capital

Resource in economics distinguish among such factors of production as:

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For the television series, see Profit (TV series)

Profit generally is the making of gain in business activity for the benefit of the owners of the business.
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Perfect competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. According to the standard economical definition of efficiency (Pareto efficiency), perfect competition would lead to a
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This article is about Economic rent as it pertains to political economy and socioeconomic theory. For other uses, see Rent.

Economic rent
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In economics, scarcity is defined as the condition of human wants and needs exceeding production possibilities. In other words, society does not have sufficient productive resources to fulfill those wants and needs.
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Land in economics comprises all naturally occurring resources whose supply is inherently fixed (i.e., does not respond to changes in price), such as geographical locations (excluding infrastructural improvements and "natural capital", which can be changed by human actions), mineral
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supply and demand describe market relations between prospective sellers and buyers of a good. The supply and demand model determines price and quantity sold in the market.
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government is a body that has the power to make and the authority to enforce rules and laws within a civil, corporate, religious, academic, or other organization or group.^[1]
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To comply with Wikipedia's lead section guidelines, it should be expanded.
Please discuss this issue on the talk page and read the lead section guide to make sure the introduction summarizes the article.
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Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine allocative efficiency within an economy and the income distribution associated with it.
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Bargaining is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement.
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National accounts or national account systems (NAS) (more generally social accounts) summarize economic activity for a nation (or other geographic area) and provide more detailed underlying measures of such information.
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Operating surplus is an accounting concept used in national accounts statistics (such as United Nations System of National Accounts (UNSNA) and in corporate and government accounts. It is also used in macro-economics as a proxy for total pre-tax profit income.
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For the television series, see Profit (TV series)

Profit generally is the making of gain in business activity for the benefit of the owners of the business.
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Heterodox economics ^[1] refers to approaches or schools of economic thought that fall outside mainstream economics, or the Walrasian model ("Walrasian economics"
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The term ruling class refers to the social class of a given society that decides upon and sets that society's political policy.

The ruling class is a particular sector of the upper class that adheres to quite specific circumstances: it has both the most material wealth and
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In economics, factors of production are resources used in the production of goods and services, including land, labor, and capital.

Land, labor, and capital

Resource in economics distinguish among such factors of production as:

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Marxian economics refers to a body of economic thought stemming from the work of Karl Marx.

The adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology, arguing that Marx's approach to understanding the economy is
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Surplus value is a concept created by Karl Marx in his critique of political economy, where its ultimate source is claimed to be unpaid surplus labor performed by the worker for the capitalist, serving as a basis for capital accumulation.
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Surplus labour is a concept used by Karl Marx in his critique of political economy. It means labour performed in excess of the labour necessary to produce the means of livelihood of the worker ("necessary labour").
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Consumer surplus or Consumer's surplus (or in the plural Consumers' surplus) is the difference between the price consumers are willing to pay (or reservation price) and the actual price.
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Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,^[1] typically in markets where goods or services are being bought and sold.
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This article or section is in need of attention from an expert on the subject.
Please help recruit one or [ improve this article] yourself. See the talk page for details.
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For the television series, see Profit (TV series)

Profit generally is the making of gain in business activity for the benefit of the owners of the business.
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Surplus value is a concept created by Karl Marx in his critique of political economy, where its ultimate source is claimed to be unpaid surplus labor performed by the worker for the capitalist, serving as a basis for capital accumulation.
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Argument

Economics is usually defined as the problem of how best to distribute limited resources, limited because wants are characterised as unlimited. Surplus economics argues that rather than limited resources, there is an abundance of resources and this is the economic
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