- 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
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.
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.
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.