1.2.8 Consumer And Producer Surplus ✅

Question 1

What is the definition of a consumer surplus?

Answer 1

It is the difference is price the consumer is paying for a good to what they are willing to pay for the good.

Question 2

What is the definition of producer surplus?

Answer 2

It is the difference between the amount (price) producers are spelling they goods for and what they are willing to sell them for.

Question 3

Where on a supply and demand diagram is the consumer surplus located?

Answer 3

Area between the equilibrium price and the supply curve.

Question 4

Where on a supply and demand diagram is the consumer surplus located?

Answer 4

Between the equilibrium price and the demand curve.

Question 5

What do consumer and producer surpluses show Overal + specifically?

Answer 5

The Econ gain from buying and selling good.
Consumer surplus shows the welfare gain (total satisfaction is area under demand but the surplus is the Net gain).
Producer surplus is the economic gain for producers .