{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

jan 25

# jan 25 - Lecture Notes Total Benefit = Sum of Marginal...

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

1/25/11 Lecture Notes Total Benefit = Sum of Marginal Benefit Consumer Surplus=Net Benefit= Total Benefit – Total Cost or while looking at the graph, find the area of the triangle that is formed with demand curve and both the x and y axis (take half of price difference * total quantity sold in price market) So far we considered o Why is the Demand curve downward sloping o How do actors maximize utility o How do we get a demand cure for the whole market o What is consumer surplus? Next: Supply Curve o Example: A men’s magazine will pay Leroy 10 cents per word to write fiction article. He must decide how to divide his time between writing fiction, which he can do at a constant rate of 200 words per hour. Versus Picking Apples which he does at a diminishing marginal return. For each hour Leroy spends picking apples, he loses \$20 he could have earned writing pulp fiction. He should thus spend an additional hour picking as long as he will add at least \$20 worth of

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 2

jan 25 - Lecture Notes Total Benefit = Sum of Marginal...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online