Consumer and Producer surplus Flashcards
1
Q
What is consumer surplus ?
A
The difference between the price consumers are willing to pay and the price they actually pay
2
Q
Where is consumer surplus found on a diagram ?
A
An normal looking triangle 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 for and the price they actually receive
4
Q
Where is producer surplus found ?
A
Downwards facing right-angled triangle above the supply curve and below the price line
5
Q
What is the equation for society surplus ?
A
Consumer surplus + Producer surplus
6
Q
A
