Econ: Unit 2 Market Equilibrium & Consumer and Producer Surplus

market equilibrium

helps us see how consumers and producers make decisions in markets based on equilibrium

Qd=Qs

price where buyers want to purchase the same amount sellers want to sell; no shortages or surpluses

consumer surplus

benefit to consumers from paying less than the price they’re willing to pay

consumer surplus

benefit to sellers from selling at a price higher than the price they’d be willing to sell

equation to find producer surplus

price equilibrium - willingness to sell

equation to find consumer surplus

willingness to pay - price equilibrium