Consumer and Producer Surplus Flashcards
1
Q
What is Consumer Surplus?
A
The difference between the price customers are willing and able to pay for a good/service and the price they actually pay.
2
Q
Where is Consumer Surplus on a demand curve graph?
A
It is always below the demand curve and above the price line.
3
Q
What is Producer Surplus?
A
The difference between the price producers are willing and able to supply a good/service and the price they actually receive.
4
Q
Where is Producer Surplus on a supply curve graph?
A
Always above the supply curve and below the price line
