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
2
Q
Where is consumer surplus on a diagram?
A
Above equilibrium
Below demand curve
3
Q
Producer Surplus
A
Difference between the price firms sell for and what they are willing to sell for
4
Q
Where is producer surplus on a diagram?
A
Below equilibrium
Below demand curve
5
Q
Impact of increasing prices on surpluses
A
Producer = increases
Consumer = decreases
6
Q
Impact of decreasing prices on surpluses
A
Producer = decreases
Consumer = increases
