Consumer's Surplus --
Total savings to consumers who are willing to pay a higer price than
the equilibrium price p'.
Producer's Surplus --
Total savings to the producer who is willing to
supply the product at a price lower than
the equilibrium price p'
(q', p') --
The equilibrium point.
q' --
The equilibrium quantity.
p' --
The equilibrium price.
Note: At the equilibrium point, (q', p'), the supply equals the demand.
Next: See how to turn Oinkle Sam's problem
into a system of equations in the "Solution Set Up."
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