Markets · Tool 02

Competitive equilibrium — consumer & producer surplus

Demand — P = a − bQ

a80

b0.6

P = 80 − 0.6Q

Supply — P = c + dQ

c10

d1.0

P = 10 + 1.0Q

Equilibrium & surplus

P*

—

Q*

—

CS

—

PS

—

Total surplus

—

Demand

Supply

Consumer surplus

Producer surplus

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Built with Claude · Amit Goyal · amit.goyal@nyu.edu

More is preferred to less.