ECO101H1 Lecture Notes - Lecture 11: Economic Equilibrium, Shortage, Allocative Efficiency
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ECO101H1 Full Course Notes
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Announcements: econ aid centres questions (apple vs pear and drop in tax for sellers on inelastic) Consumer surplus buyer"s willingness to pay for a good minus amount that they actually pay. Why is the concept of consumer surplus so important: measures benefit to consumers of participating in a market, key to making all or nothing decision. to attend a 4th (if market price was , you"ll go to 4 concerts) The promoter will only sell tickets in a package of 4 for . Insight: after you have purchased the package of tickets, the price to you of attending each concert is nil. Your consumer surplus on the 1st concert: (-0) Consumer surplus = , your consumer surplus exceeds , so you should purchase the package if its price is . You should not purchase the package if the price was since your consumer surplus is less than 300.
