ECO200Y5 Lecture Notes - Lecture 3: Demand Curve, Economic Surplus, Ontario Health Insurance Plan
Document Summary
Lecture #3 using supply and demand to analyze. Willingness to pay every point along the market demand curve represents the willingness to pay of a different consumer. Demand choke price the price at which no consumer is willing to buy a good (qd = 0) Consumer surplus the difference between how much a consumer is willing to pay and how much they actually pay for a good. Consumer surplus better depicts how much a consumer values a product rather than just looking at price. When a new substitute enters the market, the cs for the original product shrinks because the demand becomes more elastic. Supply choke price the price at which no producer is willing to sell a good for (qs = 0) Producer surplus the difference between what a producer is willing to sell their good for and what they actually receive for a good.
