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TULANE / Economics / ECON 1010 / What best defines producer surplus?

What best defines producer surplus?

What best defines producer surplus?

Description

School: Tulane University
Department: Economics
Course: Intro to Microeconomics
Professor: Toni weiss
Term: Summer 2015
Tags:
Cost: Free
Name: Consumer and Producer Surplus
Description: Notes from this week on consumer and producer surplus!
Uploaded: 09/25/2015
4 Pages 40 Views 1 Unlocks
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What best defines producer surplus?



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Class Notes 9/24 Consumer Surplus: difference between what you would I have been willing to pay vs. What you got to pay Lex: finding out something you would've bought anyway

was on sale

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45

S

pot


What do you call the total producer surplus and consumer surplus?



margnal M. Be benefit

Ostime

12

blue: total cost stue

shaded area (whole):

total benefit

Orange .consumer surplus

Ly area above the price line and below the demand are * You get Z eRo consumer surplus for the last unit


When is consumer surplus used?



We also discuss several other topics like What refers to pragmatic utility of an object?

you buy Le you're reached equilibrium price

•continue to consume until surplus is o- will consume as long Las consumer surplus is positive

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Producer Surplus : difference between what a firm would be If you want to learn more check out What are the elements of san germiniano?

Willing to sell a good for & what it gets to sell a good for J

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s, Marginal cost of producing

I cost -

Imove unt

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-Q/time Ovange producer surplus : avea blue i consumer surplus

between

lunder)

(above) parte da price & supply curve

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Producer surplus + consumer surplus - Total economic surplus ! Greatest ecasamic surplus occurs when : pas s e s

u o marginal cost = marginal benefits If you want to learn more check out What are yarns for?

• quantity demanded-quantity supplied

• When demand decreases, both consumer & producer surplus decrease

• Producer suplus usually an earlier units - due to law of

increasing opportunity cost (costs more as you go)

•consumer surplus is bigger If demand care is steeper!

consumer

I surplus

reservation price for first few is soup very high

& supply are Does NOT affect consumer surplus

al time

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x producer - profit

I surplus p

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• Consumer

surplus

Price

floory If you want to learn more check out What is the term for the chemical activities of cell?

a Price floor: Minimum price

ex minimum wage Quanty traded is determined by a ble smaller)

producer

P surpwl

Q Qt as

ahne

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deadweight

LOSS O

trades people would've wanted to engage but are NOT allowed

in

4 important concepts from today:

1) restrictions in the market lead to a loss of economic Don't forget about the age old question of What is computed in unit-elastic demand?

surplus (deadweight loss). 2 consumer surplus is when you get to pay less 3) producer surplus is when they get to sell for more

4 surpluses are LARGer whers supply & demand If you want to learn more check out Whose idea is antithesis?

curves are Steeper

3* Price floor is ABOVE equilibaum, price ceiling BELOW*

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Letle

of emergency- prices became frozen

OVOU

In State of emergenc.

gereatrs, gas, ice, etc from

rising

(to stop

prices of

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Producer surplus is smaller when suppler cane is flatter

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L

altime

- Oftine

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Deadweight loss a loss of economic surplus due to some

type of economic restriction in the

market Hexi & price restriction

productch restriction

not enough competition apolental was there - now gone

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@ which

Price bons

on due to infairness

of markt

Restrictions: Price floor: minimum (regally mandated price

something can be traded Price ceilina legally mandated maximum

I something can be tradeda

pnce

@ whic

It

consumer Sluss

X

surplus

Coup

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xamount traded in market

Will be smaller of Qs or

al Qs in this case)

a stud

price

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ceiling

producer

suplus

Qs Qui Qin altame

deadweight loss

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Price ceiling

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