a) Consumer and producer surplus
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6 Terms
define social surplus
the total monetary benefit gained by consumers and producers from market prices
state the formula for social surplus
social surplus = consumer surplus + producer surplus
define consumer surplus
the difference in the value of the amount of money a consumer is willing to spend to purchase a good or service and how much they actually spend
define producer surplus
the difference in the value of the amount of money a producer is willing to spend to supply a good or service and how much they actually spend
state when consumer and producer surplus are maximised
at market equilibrium
show how to represent consumer and producer surplus on a graph
Flashcards (49)