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Buyer Price Gap & Linear-Demand Surplus

Compare willingness to pay with an actual price, and estimate the triangular surplus under a linear demand curve.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

A willingness to pay of 100 and an actual price of 70 gives a 30 difference for one purchase. For a linear demand intercept of 100, equilibrium price 60 and quantity 200, the triangular surplus is 4,000.

Individual price gap = willingness to pay − actual price; linear-demand surplus = ½ × quantity × (price intercept − equilibrium price)

Worked example

Enter these known values and leave the other values blank.

Willingness to pay / demand price intercept
100 USD
Actual individual price
70 USD
Equilibrium market price
60 USD
Equilibrium quantity
200
Individual price difference
30 USD
Linear-demand surplus area
4000 USD

Assumptions and limitations

  • The individual and market examples share the first price input. Its meaning is the buyer’s willingness to pay in the first calculation and the demand-curve price intercept in the second.
  • The market formula assumes a straight demand line and a nonnegative quantity with equilibrium price no greater than the intercept. For a nonlinear demand curve, this triangle formula is insufficient.
  • The calculator preserves signed arithmetic. A negative price difference is not positive consumer benefit; inputs outside the model assumptions require a different economic interpretation.

Common questions

Are the individual and market surplus calculations the same?

No. One is a single price difference. The other is an area under an assumed linear demand curve, multiplying a price difference by half the market quantity.

What happens when both prices are equal?

The corresponding price difference is zero. With a zero intercept-to-equilibrium price difference, the triangular surplus is also zero.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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