9.18 Chapter 7 - Econ 101 Introduction to Microeconomics...

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Click to edit Master subtitle style Econ 101 Introduction to Microeconomics Professor Richard V. Burkhauser 7 Consumers, Producers, and the Efficiency of Markets
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Econ 101 – Professor Burkhauser Key Concepts welfare economics, p. 137 willingness to pay, p. 138 consumer surplus, p. 139 cost, p. 143 producer surplus, p. 144 efficiency, p. 148 equity, p. 148
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Econ 101 – Professor Burkhauser Figure 7.1 Consumer and Producer Surplus in the Market Equilibrium Produce r surplu s Consume r surplu s Pric e 0 Quantity Equilibriu m pric e Equilibriu m quantit y Suppl y Deman d A C B D E
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Econ 101 – Professor Burkhauser MARKET EFFICIENCY Three Insights Concerning Market Outcomes 1) Free markets allocate the supply of goods to the buyers who value them most highly, as measured by their willingness to pay. 2) Free markets allocate the demand for goods to the sellers who can produce them at least cost. 3) Free markets produce the quantity of goods that maximizes the sum of consumer and producer surplus.
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