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Chapter 7 _ Consumers, Producers, and the Efficiency of Markets Revisiting The Market Equilibrium Do the equilibrium price and quantity maximize the total welfare of buyers and sellers? Market equilibrium reflects the way markets allocate scarce resources Whether the market allocation is desirable can be addressed by welfare economics. Welfare Economics Welfare economics is the study of how the allocation of resources affects economic well being. Buyers and sellers receive benefits from taking part in the market. The equilibrium in a market maximizes the total welfare of all Consumer surplus measures economic welfare from the buyer’s side. Welfare wird gemessen an “consumer Surplus” und “Producer Surplus” Producer surplus measures economic welfare from the seller’s side. Consumer Suplus Willingness to pay is the maximum amount that a buyer will pay for a good. q=f(p) führt zu inverser Darstellung: p=g(q ) maximale Zahlungsbereitschaft It measure how much the buyer values the good or service. Consumer Surplus
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