1.2.8 Consumer and producer surplus summary
View linked note
Call Kai
Learn
Practice Test
Spaced Repetition
Match
Flashcards
Knowt Play1/7
There's no tags or description
Looks like no tags are added yet.
Name | Mastery | Learn | Test | Matching | Spaced | Call with Kai |
|---|
No analytics yet
Send a link to your students to track their progress
8 Terms
Consumer surplus
The difference between the amount consumers are willing to pay and the price they actually pay.
Producer surplus
The difference between the amount producers are willing to sell a good for and the price they actually receive.
How is consumer surplus illustrated?
It is illustrated by the difference between the demand curve (the amount they are willing to pay) and the market equilibrium price (the amount they actually pay).
What does an increase in demand do to consumer surplus?
An increase in demand tends to increase consumer surplus.
What does an increase in supply do to producer surplus?
An increase in supply tends to increase producer surplus.
What represents consumer surplus on a graph?
The darker shaded area between the demand curve and the market equilibrium price.
What represents producer surplus on a graph?
The lighter shaded area between the supply curve and the market equilibrium price.
What happens to consumer and producer surplus with a right shift in demand and supply?
Both consumer and producer surplus tend to increase.