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Unformatted text preview: produced without giving up another good or service that is more highly valued Fairness-Consumer surplus- area below the demand curve/ marginal benefit of good-price paid for the good/(quantity consumed) As the price rises, the consumer surplus falls/As price falls, the consumer surplus rises-Total amount paid = price * quantity-total benefit = amount paid + surplus Hamburger $10 $7.50 consumer surplus $2.50 Cost-what seller gives up to produce the good-supply curve- minimum price must receive to produce a good-marginal cost curve/minimum price the seller must receive Price- what seller receives to produce the good Producer surplus= pirce of good-cost to produce the good Producer surplus-Net benefit of sellers participating in a market (grey shaded area)...
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- Fall '10