Example of calculating consumer surplus from a College Education - FreeEconHelp.com, Learning Economics... Solved!


Example of calculating consumer surplus from a College Education

Receiving a college education is a big deal, and can help improve your opportunities later in life.  For most people, the benefits of receiving a college education far outweigh the costs, which is an example of consumer surplus.  This post goes over the economics of calculating consumer surplus using the market for College Education as an example.

We can start with our typical supply and demand graph focusing on the market for college education.  We can find equilibrium by locating where supply and demand intersect, and following this point to the axis to figure out equilibrium price and quantity.  You can see an example of this in the graph to the right.

Now we need to find the total difference between each consumer’s willingness to pay for college education and the price that they actually have to pay (market equilibrium).  Since the demand curve is a straight line, we can calculate the area below the demand curve and above the equilibrium price by using the area of a triangle formula. 

In this example, the height of the triangle is going to be the difference between the intercept of the demand curve with price (2700) and the market price (1500) times the quantity being purchased (1200) all times ½ because it is a triangle.  This gives us:

!/2(1200*1200) or 720,000 as our consumer surplus.

This means that each individual student gets more benefit from having a college education than the amount they have to pay for it (except for that very last student located at the equilibrium point).  This means that a typical student taking graphic design classes is receiving a much higher benefit in terms of future value the cost being paid from his pocket. 


  1. James D. Williamson20 November

    A written perfectly and hot and cold was very much easy to understand.

  2. Phyllis D. Melton21 November

    Educated person have strong and wide range mind for thinking about everything but an uneducated person sees all things with one glance and collect some bad ideas some decision that hurts them badly. Here is the best place to buy essays for getting valuable writing knowledge for their writing work.

  3. This comment has been removed by a blog administrator.

  4. Thanks for sharing amazing information !!!!!!
    Please keep up sharing.

  5. I read this article. I think You put a considerable measure of push to make this article. I value your work.

  6. It’s very excellent information and more real facts to provided that post.Thank you for sharing this information.

  7. I really loved reading your blog. It was very well authored and easy to undertand. Unlike additional blogs I have read which are really not tht good. I also found your posts very interesting. In fact after reading MB6-894 exam questions, I had to go show it to my friend and he ejoyed it as well!