FIGURE 3 CONSUMER AND PRODUCER SURPLUS WHEN PRICES EXCEED EQUILIBRIUM

Compared to the equilibrium price, a price of $400 would prevent some consumers from purchasing the product. A loss of consumer surplus equal to the blue area occurs. Further, consumers who still purchase the product pay $100 more than the equilibrium price, causing an additional loss of consumer surplus equal to the pink area. Producers, meanwhile, lose producer surplus equal to the yellow area resulting from the units that consumers no longer buy, but earn additional producer surplus equal to the pink area as a result of the higher price. Total lost surplus, called deadweight loss, is represented by the blue and yellow areas (no one gets this because some trades are not made now). The pink area is surplus transferred from consumers to producers because of the higher price.