Consumer and Producer surplus Flashcards
1
Q
Consumer surplus
A
the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay in regards to the market clearing price
2
Q
How is consumer surplus shown diagrammatically
A
the area under the demand curve and above the market price
3
Q
Producer surplus
A
the difference between the price producers are willing and able to supply a good or service for, and the price they actually receive
4
Q
how is producer surplus shown diagrammatically
A
the area above the supply curve and below the market price
