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Unformatted text preview: c. Buddy gets a bargain i. Willingness to pay- Actual Price paid= difference 1. = consumer surplus c. What it all represents i. Benefit to buyer ii. Over and above consumption benefits of participating in market CS on Graph iii. Red= consumer surplus iv. Height of a curve tells what the marginal buyer is willing to pay d. Effect on CS of Price (caused by S) i. supply P & CS IV.Producer Surplus a. Ex: backyard needs mole control i. 4 mole slayers ii. Each has min acceptable price to do job iii. Min price = opportunity cost iv....
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- Winter '09