Consumer Surplus and Supply

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5 Terms

1
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Consumer Surplus

is the difference between the price the consumer is willing to pay and when the price charged on the last unit sold

2
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Supply

is the amount that the producer is willing and able to produce at a given price over a period of time

3
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producer surplus

The difference between the price the firm is willing to sell the product at and the price that they actually received after the last sold unit

4
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changes in supply

change in cost of material

advances in technology

exogenous factor eg weather

changes in productivity

indirect or direct tax

change in the price of goods

changes in the number of firms

5
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changes in the elasticity

spare capacity

number of firms

advancement in technology

length of the process

time period

holding of stocks

availability of factor for production