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Unformatted text preview: minus the total amount they must pay to buy the good or services Similarly, producer surplus measures the net benefit received by producers from participating in a market Producer surplus in a market is equal to the total amount firms receive from consumers minus the cost of producing the good or service-Deadweight Loss – the reduction in economic surplus resulting from a market not being in competitive equilibrium-Economic Efficiency – a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumers surplus and producer surplus is at a maximum-Black Market – a market in which buying and selling take place at prices that violate government price regulation-Tax Incidence – the actual division of the burden of a tax between buyers and sellers in a market...
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This note was uploaded on 01/19/2012 for the course CIT 230 taught by Professor Staff during the Fall '08 term at Oakland University.
- Fall '08