surplus Flashcards
1
Q
consumer surplus definition
A
the excess money those who would have paid more for a good get to keep because they got it for a lower price
2
Q
how to find consumer surplus
A
the area below the demand curve and above the market clearing price
3
Q
producer surplus definition
A
the difference between the lowest rice a firm would sell for and the price it actually receives
4
Q
how to find producer surplus
A
the area above the supply curve below the market clearing price
5
Q
producer welfare =
A
producer surplus
6
Q
consumer welfare=
A
consumer surplus + consumer sovereignty + quality
7
Q
total economic welfare
A
producer welfare plus consumer welfare
8
Q
A
