ECON 1000 Chapter Notes - Chapter 7: Demand Curve, Opportunity Cost, Economic Surplus
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Chapter 7: consumers, producers, and the efficiency of markets. Ea(cid:272)h (cid:271)u(cid:455)er"s (cid:373)a(cid:454)i(cid:373)u(cid:373) is (cid:272)alled his (cid:449)illi(cid:374)g(cid:374)ess to pa(cid:455), a(cid:374)d it (cid:373)easures ho(cid:449) (cid:373)u(cid:272)h that (cid:271)u(cid:455)er values the good. People would be eager to purchase the item below the amount that they are willing to pay. The buyer would refuse to buy the album at a price more than his willingness to pay. And at a price equal to his willingness to pay, the buyer would be indifferent about buying the good. Consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. Using the demand curve to measure consumer surplus. At any quantity, the price given by the deand curve shows the willingness to pay of the marginal buyer, the buyer who would leabe the market first if the price was any higher.