ECON 101 Lecture 6: Chapter 6: A Win-Win Outcome: The Efficiency of Markets
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Chapter 6: a win-win outcome: the efficiency of markets. When buyers and sellers interact in markets, the price of a product influences their behavior. Marginal benefit the additional benefit a buyer gets from consuming an additional unit of a product: the maximum a consumer is willing to pay for each unit tells how much the consumer benefits from that unit. Each buyer of a product will buy an additional unit of that product as long as the marginal benefit he gets is at least as great as the price he has to pay for it. As the quantity of a product consumed increases, the marginal benefit of consuming an additional unit of that product decreases. Marginal cost the additional cost of producing another unit of a product: a seller compares the additional cost of producing another unit to its price. Price the revenue earned selling the product.
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