MINDMAP 1.pdf - Supply and Demand Any shfits away from...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Supply and Demand Any shfits away from equilibrium will result in DD and SS adjust until a new equilium is reached. A shift in SS to the right will cause a surplus and put a downward pressure on price, ceteris paribus. A shift in DD to the right will cause a shortage and put upward pressure When there is shifting both DD and SS in the same direction, the magnitude of the shift would determine the direction of pressure on price Consumer surplus is the gap between the price that consumers are willing to pay—based on their preferences—and the market equilibrium price. Producer surplus is the gap between the price for which producers are willing to sell a product—based on their costs—and the market equilibrium price. Consumer and Producer Surplus Social surplus is the sum of consumer surplus and producer surplus. Total surplus is larger at the equilibrium quantity and price than it will be at any other quantity and price.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern