What is total surplus in economics?

In economics, total surplus—also referred to as total social welfare, social surplus, or economics surplus—refers to the extra benefits that producers and consumers get from selling or buying a good. For sellers, this benefit comes from selling goods at a price that is higher than the minimum price they are willing to charge.

What is a consumer surplus?

A consumer surplus occurs if this buyer ultimately purchases the artwork for less than his predetermined limit. In another example, let's assume the price per barrel of oil drops, causing gas prices to dip below the price a driver is accustomed to shelling out at the pump. In this case, the consumer profits from a surplus.

What happens if a product has a surplus?

Typically, a surplus causes a market disequilibrium in the supply and demand of a product. This imbalance can sometimes mean that the product cannot efficiently flow through the market. A surplus isn't necessarily desirable.