Social/Community Surplus
Competitive Market Equilibrium
AO2·AO4
Syllabus requirement
The sum of consumer and producer surplus; indicates total welfare in a market.
Assessment objectives
AO2 Application and AnalysisAO4 Use of Appropriate Skills
Summary
Community (social) surplus is the total of consumer and producer surplus in a market at a given price and output. It measures the total benefit to society from market transactions and is maximized when the price mechanism clears the market so there are no shortages or surpluses, indicating an efficient allocation of resources.
