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Chapter6 - Economics:Chapter6 13:11:00 ConsumerSurplus...

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Economics: Chapter 6 26/09/2007 13:11:00 Consumer Surplus     Willingness to pay:  Maximum price at which a person will buy a good. Individual Consumer Surplus:  The net gain to an individual buyer from the  purchase of a good.  It is equal to te difference between the buyer’s willingness to pay  and the price paid. Total Consumer Surplus:  The sum of the individual consumer surpluses of all  the buyers of a good. Consumer Surplus:  Used to refer to both individual and to total consumer  surplus.
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Consumer surplus is equal to the area under the demand curve but above the  price. Producer Surplus     Cost:  Lowest price at which he or she is willing to sell a good. Individual Producer Surplus:  Net gain to a seller from selling a good.  Equal to  the difference between the price received and the sellers cost.
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