2.4 - surpluses Flashcards

Consumer + producer surplus

1
Q

Consumer Surplus

A

Difference between the price consumers pay and what they are willing to pay

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2
Q

Where is consumer surplus on a diagram?

A

Above equilibrium
Below demand curve

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3
Q

Producer Surplus

A

Difference between the price firms sell for and what they are willing to sell for

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4
Q

Where is producer surplus on a diagram?

A

Below equilibrium
Below demand curve

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5
Q

Impact of increasing prices on surpluses

A

Producer = increases
Consumer = decreases

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6
Q

Impact of decreasing prices on surpluses

A

Producer = decreases
Consumer = increases

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