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total surplus.
The sum of consumer surplus and producer surplus is social surplus, also referred to as economic surplus or total surplus.
Demand
________ is fundamentally based on needs and wants.
producer surplus.
The amount that a seller is paid for a good minus the sellers actual cost is called producer surplus.
Demand
________ is also based on ability to pay.
Law of Demand
As the price increases, the quantity demanded decreases and as the price decreases the quantity demanded increases
Supply
The amount of good and services a producer is willing to supply
Law of supply
The higher the price leads to a higher quantity and the lower price leads to a lower quantity supplied
equilibrium
The point where the supply curve and demand curve cross
price ceilings
keeps a price from rising above a certain level
price floor
a lowest price that one can legally pay from some good or service
consumer surplus
The amount of individuals would have been willing to pay minus the amount they actually pay
deadweight loss
the loss in social surplus that occurs when the economy produces an inefficient quantity
Note
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