1.2.8 - consumer and producer surplus Flashcards
1
Q
What is consumer surplus?
A
The difference between what consumers are willing and able to pay and what they actually pay.
2
Q
What is producer surplus?
A
The difference between the price firms are willing and able to supply and the price they actually receive in the market.
3
Q
Where is consumer surplus found on a supply and demand diagram?
A
Between the market/equilibrium price and the demand curve.
4
Q
Where is producer surplus found on a supply and demand diagram?
A
Between the market/equilibrium price and the supply curve.
