Figure 6.12 Net Benefit: The Sum of Consumer and Producer Surplus The sum of consumer surplus and producer surplus measures the net benefit to society of any level of economic activity Net benefit is maximized when production and consumption are carried out at the level where the demand and supply curves intersect Here, the net benefit to society equals the area ACD It is the sum of consumer surplus, BCD, and producer surplus, ABD We put the demand and supply curves of Figure 6.11 "Consumer and Producer Surplus" Panels (a) and (b) together in Figure 6.12 "Net Benefit: The Sum of Consumer and Producer Surplus" The intersection of the two curves determines the equilibrium price, OB, and the equilibrium quantity, OE The shaded regions give us consumer and producer surplus The sum of these two surpluses is net benefit This net benefit is maximized where the demand and supply curves intersect Efficiency and Equity Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 322