Consumer And Producer Surplus Flashcards
1
Q
What is consumer surplus
A
The difference between the price consumers are willing and able to pay for a good and service and the price they actually pay for
2
Q
Where is the consumer surplus found
A
Below the demand curve and above the price line
3
Q
What does a price rise do to consumer surplus
A
Decreases
4
Q
What does a price fall do to consumer surplus
A
Increase
5
Q
What is 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
6
Q
Where is producer surplus
A
Above the supply curve and below the price line
7
Q
What does a price rise do to producer surplus
A
Increases
8
Q
What does a price fall do to producer surplus
A
Decreases
