Figure 13-1: Consumer surplus for lectures

Consumer surplus

$100

Person 100

Quantity of people

Figure 13-2: Consumer surplus after a price

increase

$110

$100

Lost consumer surplus

Person
90

Person

100

Quantity of people

Figure 13-3: Consumer surplus and

elasticity of demand

Consumer surplus
100

Person
100

Quantity of people

Figure 13-4: Producer surplus

Producer surplus
P

Number of students

Figure 13-5: Impact of a decrease in output on

welfare

p, $ per unit

Supply
R
e2

p2
S

MC1 = p1

e1

U
Demand

T
MC2
F

Q2

Q1

Q, Units per year

Image by MIT OpenCourseWare.

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Figure 13-6: Effect of a Restriction

on the Number of Cabs

Cab Firm

AC2
AC1

p, $ per ride

p, $ per ride

MC

Market

e2

p2

E2

p2
B

p1

S2

E1

p1

e1

S
D

q1 q2

n2q1

q, Rides per month

Consumer surplus, CS
Producer surplus, PS
Welfare, W = CS + PS

Q2 = n2q2

Q1 = n1q1

q, Rides per month

No restrictions

Restrictions

Change

A+B+C

-B - C = CS

B = PS

A+B+C

A+B

-C = W = DWL
Images by MIT OpenCourseWare.

9-6

MIT OpenCourseWare
http://ocw.mit.edu

14.01SC Principles of Microeconomics

Fall 2011

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