Week6__surplus_1

Week6__surplus_1 - D Q P P* 8 Producer surplus A potential...

Info iconThis preview shows pages 1–14. Sign up to view the full content.

View Full Document Right Arrow Icon
05/07/09 Econ 2005 1 Principles of Microeconomics Econ 2005 Week 6 Lecture 2 Consumer and producer surplus Chapter 6
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 Outline Welfare economics of market allocations Gains from trade again: consumer + producer  surplus The concepts of consumer surplus and  producer surplus help us understand why  markets are an effective way to organize  economic activity Effect of intervening in markets (Friday) Taxes and quotas 
Background image of page 2
3 Consumer surplus  Individual consumer surplus Total consumer surplus
Background image of page 3

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

View Full DocumentRight Arrow Icon
4 Consumer surplus and demand for used books
Background image of page 4
5 Fall in price increases consumer surplus
Background image of page 5

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

View Full DocumentRight Arrow Icon
6 Total consumer surplus: D Q P P*
Background image of page 6
7 Fall in price and CS
Background image of page 7

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

View Full DocumentRight Arrow Icon
Background image of page 8
Background image of page 9

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

View Full DocumentRight Arrow Icon
Background image of page 10
Background image of page 11

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

View Full DocumentRight Arrow Icon
Background image of page 12
Background image of page 13

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

View Full DocumentRight Arrow Icon
Background image of page 14
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: D Q P P* 8 Producer surplus A potential sellers cost is the lowest price at which he or she is willing to sell a good. Individual producer surplus Total producer surplus 9 Producer surplus and the supply curve for used books 10 Increase in price raises producer surplus 11 Total Producer surplus: S Q P P* 12 Rise in price increases producer surplus S Q P P* 13 Total surplus: consumer plus producer S Q P P* 14 Efficiency of market equilibrium The maximum possible total surplus . In the market equilibrium there is no way to...
View Full Document

This note was uploaded on 03/30/2008 for the course ECON 2005 taught by Professor Zirkle during the Fall '07 term at Virginia Tech.

Page1 / 14

Week6__surplus_1 - D Q P P* 8 Producer surplus A potential...

This preview shows document pages 1 - 14. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online