Benefits to Market Participants•Measures of economic well-being or welfare: Consumer Surplus and Producer Surplus•Markets and voluntary exchange are efficient ways to organize production and allocate resources
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Horizontal and Vertical Interpretation of Demand Curves•Horizontal…–How much consumers wish to purchase at various prices•Vertical…–Shows the willingness to pay at various quantities–The height shows the value (MB) of the goodQuantityPrice D$5$323
Horizontal and Vertical Interpretation of Supply Curves•Horizontal…–How much producers wish to sell at various prices•Vertical…–Shows the smallest amount a seller would be willing to accept for the good.–The height is the opportunity cost (MC) of supplying the goodQuantityPrice S$5$6108