CH6 Terms - consumer surplus The difference between the...

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consumer surplus The difference between the maximum price a consumer is (or consumers are) willing to pay for an additional unit of a product and its market price; the triangular area below the demand curve and above the market price. cross elasticity of demand The ratio of the percentage change in quantity demanded of one good to the percentage change in the price of some other good. A positive coefficient indicates the two products are substitute goods; a negative coefficient indicates they are complementary goods. efficiency loss Reductions in combined consumer and producer surplus caused by an underallocation or overallocation of resources to the production of a good or service. elastic demand Product or resource demand whose price elasticity is greater than 1. This means the resulting change in quantity demanded is greater than the percentage change in price. elastic supply Product or resource supply whose price elasticity is greater than 1. This means the resulting change in quantity supplied is greater than the percentage change in price. elasticity coefficient
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This note was uploaded on 01/30/2011 for the course ECO 218 taught by Professor Dr.rhibidaoud during the Spring '10 term at Sinclair CC.

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CH6 Terms - consumer surplus The difference between the...

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