Consumer and producer surplus

Question 1

Define consumer surplus?

Answer 1

The difference between the price consumer is willing and able to pay for a good/service and the price they actually pay.

Question 2

How do you know it’s consumer surplus?

Answer 2

When it’s below the demand curve and above the price line.

Question 3

Define producer surplus?

Answer 3

The difference between the price producers are willing and able to supply a good/service for and the price they actually receive.

Question 4

How do you know its producer surplus?

Answer 4

It’s above the supply curve and below the price line.

Question 5

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Answer 5

Just know that consumer surplus is above the supply line

just know the producer surplus is below the demand line.