EC 201 Lecture Notes - Lecture 4: Economic Surplus, Consumer Choice, Demand Curve
25 Apr 2018
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= maximum price a consumer will pay for a good/service. Total consumer surplus is = area below the demand curve but above the price. Fall in price of a good increases consumer surplus through 2 channels. Gain to consumers who would have bought at the org price. Gain to consumer who are persuaded to buy by the lower price. Consumer surplus and fall in price of used textbooks. Calc the change in consumer surplus from the decrease in price. Calc the total consumer surplus at new price. = individual producer surplus: the net benefit to producer from the sale of. = individual producer surplus: the net benefit to producer from the sale of goods. Total producer surplus = net benefit for any given # of producers examples. Total producer surplus for sales of a good at a given price = areas above this supply curve but below that price.
