The total surplus also known as the total welfare in a market is a measure of the total well being of all participants in a market. It is the sum of consumer surplus and producer surplus.
Formula to calculate total surplus.
Consumer is the difference between the maximum amount a consumer is willing to pay and the actual amount they pay.
Producer surplus is the difference between the amount the producer is willing to supply goods for and the actual amount received by him when he makes the trade.
Calculate the total surplus if the producer surplus is $ 500,000 and the consumer surplus is 400,000.
Therefore, the total surplus is $ 900,000.