The consumer surplus is one of the most beautiful things in market capitalism, something that is shared by all of us. Yes rich people get more of it than poor people, so it is shared unequally, but it is there for every one to take.

If you understand that prices are determined by supply and demand in markets and the marginal principle determines the final price, the consumer surplus is the integral of the demand curve from zero to the amount supplied less the market price of that demand. (The blue area in the diagram)

For example as a rich person I would be prepared to pay $10 for a price of bread if that was the price. The market price is actually $6. Then the consumer surplus for me is $4. I am getting a bargain on bread because I am paying $4 less than I would have paid – I would have been prepared to pay $10.

Like I said one of the most beautiful things in market capitalism – we all benefit.