ECO100Y5 Chapter Notes - Chapter 4: Economic Surplus, Demand Curve, Opportunity Cost

• School: UTM
• Department: Economics
• Course: ECO100Y5
• Professor: Michael H O

Document Summary

After using their textbooks students sell their used textbooks which has created an additional market, sometimes bookstores buy these used textbooks off of students. The benefits to the consumer and the producer; known as producer and consumer surplus. This is useful in analyzing economic issues. A consumer"s willingness to pay for a good is the maximum price at which he or she would buy that good. Individual consumer surplus is the net gain to an individual buyer from the purchase of a good. It is equal to the difference between the buyer"s willingness to pay and the price paid. B/c we are considering small number of consumers it is step shaped. Each step is a consumers willingness to pay. The quantity of books at the bottom is not the number of books that will be given at that price but more how many will be given out.