week4-082 - Benefits to Market Participants Measures of...

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1 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 Horizontal and Vertical Interpretation of Demand Curves •H o r i z o n t a l… How much consumers wish to purchase at various prices •V e r t i c a l… Shows the willingness to pay at various quantities The height shows the value (MB) of the good Quantity Price D $5 $3 2 3 Consumer Surplus Consumer Surplus Price Quantity, thousands per week D
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2 Horizontal and Vertical Interpretation of Supply Curves •H o r i z o n t a l… How much producers wish to sell at various prices •V e r t i c
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This note was uploaded on 04/29/2008 for the course ECON 0100 taught by Professor Kenkel during the Spring '08 term at Pittsburgh.

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week4-082 - Benefits to Market Participants Measures of...

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