ch._4_economics

Ch_4_economics - accept and the price it actually receives When the price of a good increases the producer surplus will increase and when a good

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Nancy Crawley Chapter 4 Page 124 1.3: Consumer surplus is the difference between the highest price a consumer is willing to pay and the price the consumer actually pays. The consumer surplus will rise or fall depending on what the equilibrium price of a good does. If equilibrium rises then the consumer surplus will fall. If the equilibrium falls then the consumer surplus will rise. 1.4: Producer surplus is the difference between the lowest price a firm would be willing to
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Unformatted text preview: accept and the price it actually receives. When the price of a good increases the producer surplus will increase and when a good price decreases the producer surplus will decrease. Page 125 2.5: I agree with this statement. I agree because when the equilibrium moves up or down if affects both consumer and producer surplus. When consumer surplus increases the producer has to decrease....
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This note was uploaded on 01/05/2012 for the course ECON 200 taught by Professor Dr.frank during the Spring '10 term at Wingate.

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