Equilibrium, Allocative Efficiency, and Total Surplus
If you guess our next step is to combine consumer and producer surplus, you are right on track. We call the sum of consumer and producer surplus social surplus, total surplus, or economic surplus. Social surplus is greater at the equilibrium quantity and price than it would be at any other quantity.
This demonstrates the economic efficiency of the market equilibrium. Furthermore, at the efficient market quantity (the equilibrium quantity), it is impossible to increase consumer surplus without reducing producer surplus, and vice versa.
Watch this video, which reviews consumer and producer surplus and introduces total surplus in the context of efficiency.
Source: Khan Academy, https://www.youtube.com/watch?v=E_EmGO1XuHM
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